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Mashery, a startup that helps software companies market, distribute and keep track of their application programming interfaces (APIs), has just raised $5.5 million in a third round of venture funding, according to a filing with the SEC.

With more web-based startups releasing APIs to extend their capabilities and engage users, this type of service seems to be in higher demand than ever — a fact that attracted attention and cash from Cisco Systems. The Silicon Valley giant led the financing round for Mashery, which is also backed by First Round Capital, 406 Ventures and Formative Ventures.

Headquartered nearby in San Francisco, Mashery plans to use its new money to fuel product development and expand its headcount to handle a growing number of clients, according to TechCrunch. Right now, the company says it works with about 40,000 software developers across the country — a roster that includes Netflix, Compete and the New York Times. The partnership with Cisco should give the startup access to even more top-tier customers.

One example of what Mashery does for its clients is in today’s news on ReadWriteWeb. Etsy Addict, the iPhone application launched to complement Etsy — an e-commerce site specializing in hand-crafted arts and goods — is built on top of an API that is “powered” (read: managed and maintained) by Mashery.

Not only does Mashery provide security to the apps it powers, it catches and fixes bugs, and provides extensive data on how many people are using the apps in question, who they are, and why they are using them. This opens up new opportunities for its customers to advertise and optimize the services their apps are delivering, the company says.

Mashery previously raised $8.2 million over three rounds — most recently in October 2008. Past investors include Rose Tech Ventures, the Accelerator Group, Salesforce.com CEO Marc Benioff, and angels Dave McClure, Roger Ehrenberg and Jeff Stewart.

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