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API analytics startup Moesif today announced that it raised $12 million in a series A round led by Craft Ventures, with participation from previous investor Merus Capital. The new funding, which brings the San Francisco, California-based startup’s total raise to $15.5 million, will be used to hire across engineering, sales, developer relations, and customer success, according to CEO Derric Gilling.
With the success of “API-first” companies like Stripe and Twilio, which are now valued at $95 billion and $65 billion, respectively, companies are investing in new API-first strategies at a record pace. As McKinsey notes, APIs, which were once largely limited to technical domains, have become a significant engine of business growth, allowing organizations to monetize data, forge partnerships, and open new pathways for innovation. However, delivering and selling an API is fundamentally different than doing so for traditional software-as-a-a-service, causing a new set of business challenges from monetization to analytics.
Moesif, which was founded in 2017 by ex-Intel engineer Gilling and Xing Wang, a former executive producer at Zynga, seeks to develop a solution that helps businesses measure API returns through sophisticated analytics. Using the Moesif platform, product owners can monitor activation funnels — for example, the time that it took for developers to sign up and make their first API call — or proactively reach out when a customer is struggling with an API.
“When we raised our [first funding] round, we just started trialing our API analytics features with a few users. Since then, we built … user behavior analytics around APIs, and also additional capabilities like embedded API metrics, behavioral emails, and extensions with tools … to solve the broader business challenges of delivering API products at scale,” Gilling told VentureBeat via email.
APIs can be a massive revenue driver. As of 2015, Salesforce generated 50% of its revenue through APIs, Expedia generated 90%, and eBay 60%, according to Harvard Business Review. That’s because of the enormous market — there are an estimated 19.1 million API developers in the world, with only 11% of developers in one recent survey claiming they don’t use APIs in any capacity.
Gilling says that Moesif’s thousands of free users — and 60 paying users, including Deloitte, UPS, and others in financial, healthtech, logistics, and enterprise software industries — are aligned with the startup’s vision of creating an open API platform for developers to create custom reporting and workflows in pursuit of better product experiences. Moesif recently partnered with popular API management vendors, providing plugins to enable developers to deploy the platform to production quickly, and shipped capabilities like governance to solve the broader business challenges of delivering API products at scale.
“[We use technologies like AI to] identify anomalous behavior, such as when a new customer struggles integrating the API or unintentionally abusing it. This is driven from API usage data and also end-user behaviors, like when they signed up,” Gilling explained. “Besides a brief slowdown when the pandemic first began, we’ve seen an acceleration in revenue as more companies are investing in [these sorts of solutions].”
Nine-employee Moesif’s revenue has been growing 20% month-over-month through 2021. Gilling says that the money will be put toward workflows, partnerships, and R&D to develop “deeper and more actionable API analytics” for product owners to keep track of their API program.
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