Something funny is happening in Silicon Valley.
Lots of hot tech companies, like $5 billion startup Stripe or the $3 billion publicly traded Twilio, don't really have a "product," in the traditional sense of the word.
What they sell is a little more intangible: The ability for a software developer to easily add extensive new capabilities to their apps and software, by way of what's called an "API," or "application programming interface."
To use the examples of Stripe and Twilio, they let developers build apps that can take credit card payments or send text messages and phone calls, respectively — without needing to be experts in the notoriously difficult worlds of payment processing or telecommunications.
This is only the tip of the iceberg, by the reckoning of RapidAPI CEO Iddo Gino, with lots more businesses like these API companies soon to pop up, and lots more developers who will be looking to take advantage.
That's why RapidAPI just raised a $3.5 million early-stage investment round, led by Andreessen Horowitz general partner Martin Casado, formerly the cofounder of Nicira, which VMware bought for $1.26 billion. FundersClub, SV Angel and Green Bay Advisors also participated.
RapidAPI is chasing the opportunity with its flagship technology for helping developers find and integrate the perfect API. That's a difficult task, given the complexity involved. There are over 20,000 developers using the tech today, says Iddo.
"There's so much unease, so much unrest," says Gino.
With the problem of managing those APIs sorted, Gino says, it'll be a lot easier for developers to build cool new software that interacts with other software in interesting, unforeseeable ways. As apps look to stand out on the shelves, Gino says, it'll be the ones that take advantage of APIs to do more and move faster that thrive.
Manage the uncertainty
RapidAPI gives software developers an easy way to manage all the moving pieces involved as they're working with APIs from a bunch of outside sources or other software.
The Uber app, for example, uses the PayPal Braintree API to accept payments, Twilio to send text message updates when your car is outside, the Google Maps API to route drivers (but maybe not for much longer), and probably others the outside world doesn't know about. For a developer, that can be a lot of complexity to manage.
Casado says developers are "overjoyed" to have a tool like RapidAPI to manage the rising tide of the so-called "API economy." And from Andreessen Horowitz's standpoint, it fits right in with the notion that selling software straight to developers is a huge-and-growing market opportunity.
"More and more developers are consuming functionality as an API," Casado says.
The real opportunity
So far, RapidAPI has found success with small teams of developers. But Gino thinks it could make a huge dent in the business software market, too. To understand why, it helps to know some history.
Back in 2002, Jeff Bezos issued his famous "API mandate," which dictated that all teams within Amazon could only use APIs to communicate with each other's technology. If the shopping cart team wants to integrate with the Wish List team, that needs to be done via API. Same for Amazon Movies and Amazon TV. And so on.
Lots of big companies are making their own moves in this direction, in a trend called "microservices," where they take their existing software and infrastructure and turn it into an API.
"Once you have a piece of software, you want to turn it into an API," Gino says.
Not every company has Amazon's resources when it comes to managing those APIs, though, Gino says. And given that disparate bits of software at a company might have been built by different teams at different times, he says, it's hard to get them all to speak to each other.
That's where RapidAPI comes in, and where it can make a lot of money. By providing one single platform, for every API to plug into, it removes the headaches, and enables development teams to move faster. They can mix-and-match internal APIs, and external ones.
"We'll see more and more APIs being added," Gino says.
