A year after securing a $50 million funding, Postman is in the news again for possibly another round of financing – this time, at a valuation of $2 billion! According to a report, the Bengaluru-based startup is in talks with Insight Partners to raise fresh funds to further accelerate its product development roadmap.
While this may be good news for the six-year-old company, continued investor interest and enhanced development of API software signals a collective win for the larger developer ecosystem. Postman co-founder and CEO Abhinav Asthana, through a press release last year, had indicated why:
“APIs are the building blocks of effective software – so while software might be eating the world, we know that APIs are eating software. Innovation in APIs will drive the future of software development.”
Understanding How Modern Software Is Built On APIs
For the uninitiated, an application programming interface (API) is a form of code that allows or powers interoperability between apps, and Postman enables that by providing a platform for its development. While all companies build APIs internally, the Postman’s collaborative feature is what makes it a model system for a growing – and connected – developer ecosystem.
For context, let us take an example from the airline industry. Imagine yourself in simpler times when booking a flight was commonplace. Right after making the payment, you would have got a notification on Whatsapp. While this may seem quite straightforward to a user, such an association between the airline and the messaging app requires a way for the two to communicate with each other, and APIs facilitate that.
The same is true for any two businesses that need to interact with each other. What is more, while some of these collaborations may be part of larger partnerships between companies, these APIs have generated more business opportunities for firms by creating additional layers by which data could be monetised.
For instance, take the example of the San Francisco-based startup Stripe. It sells APIs to companies seeking seamless payment methods for their customers across the world. By integrating with its API, partner companies also get additional benefits, including credit card regulation, and more, allowing them to focus on their core competencies.
Building APIs is a team effort and demands seamless workflows between developers. Given the criticality of its role in shaping the way businesses operate today – within and across industries – tools like Postman that develop these APIs should be allowed to thrive, as demonstrated by the increased interest in funding the platform.
And while the fundamentals of API design are firmly established, there is much room for innovation in order to capture its true value. In fact, although Postman credits its popularity to its simple UI that allows developers to easily manage every stage of the API lifecycle, additional features demand continuous learning and iterations. These innovations in APIs will drive the future of software development and scale its usage.
How API Space Is Evolving In Developer Ecosystem
From being the flag bearers for software companies to making the switch from code-first to API-first, Postman today supports API development at over 5,00,000 companies around the world including Microsoft, Twitter, and Adobe, among others. In fact, back in 2014, even before the company came into being, it reportedly served half a million users in almost every country in the world.
Investors have begun to realise the role APIs can play in businesses and the need for developers to get access to proper tools to develop and manage these APIs. In addition to Postman, they have been making bolder bets in the API ecosystem in 2020.
For instance, Chennai-headquartered Yap raised Rs 10 crore in angel funding early this year from top investors including Amrish Rau, former CEO of PayU India, and Kunal Shah, founder of Cred. In another example, RapidAPI recently raised another $25 million from existing investors, including Microsoft.
These investments have driven new approaches to develop APIs that keep consumers at its focal point while giving a great user experience for developers. According to a report, Postman has taken a concerted effort to steer its product to align with this. Beginning with the question – who will be using this API and why – the startup walks backwards from there to create a truly consumer-driven API.
And this is just the tip of the iceberg. As iterations evolve, APIs have been delivering more advanced services that integrate AI and ML to deliver more sophisticated operations. Furthermore, these advancements could expand its scope beyond the developer community to bring product managers, sales, marketing, finance teams etc into its fold to create a truly connected system architecture.
Once the linchpin of the developer community, APIs have shored up to business boardrooms, linking technologies and organisations to drive future innovations. It has opened up the developer ecosystem to absorb other partners to unlock new opportunities.According to a McKinsey report, nearly $1 trillion could be up for grabs through redistribution of revenues across sectors. This means that the developer ecosystem with the support of API networks could play a crucial role in forging profitable partnerships and creating new pathways for growth.