What do Investors

Look for in API

Startups?

@rodrigoMrz API days Mediterranea

About us

@PointNineCap ● Berlin-based, 2011

● 45mEur

● Seed & Series A

(500k-1mEur)

● Europe & North America

● 65% SaaS investments

Search as a

Service

Translation as a

Service CMS as a Service

Alerts as a Service Helpdesk as a

Service Forms as a Service

@rodrigoMrz

Agenda

APIs from Investors’ POV

What do investors look for in APIs Startups:

● Great market

● Great product

● Great team

● Great business

As-seen-in VC: Examples and Trends

@rodrigoMrz

APIs from Investors’ POV

APIs as core

We APIs

APIs ecosystem

APIs as by-product APIs as strategy

+100

+bn

+100

Funds

Exits

Rev

@rodrigoMrz

APIs from Investors’ POV Marketing

Potentially low cost of

acquisition Because:

a) inbound: developers as proactive

customers

b) referrals: word of mouth works well Churn

Potentially high lock-in Because:

a) “don’t touch what works”

Conversion rate

Potentially high conversion Because:

a) Developers do their own research

b) APIs solve “tough” problems

c) Usually somebody else paying

Competition

Potential commoditization Long-term threat, because:

a) Developers building developer tools

b) Hard to build brand in back-end

Competitive advantage

Technically challenging Because:

a) Scalability issues

b) Good tech people are hard to find

(+ expensive)

@rodrigoMrz

What do Investors Look for in

API Startups*

● Great market

● Great product

● Great team

● Great business

Great Market

Great Products

Great Teams

Great Business

+ traction helps!

* As always @rodrigoMrz

Great Market

Big Market Urgent&Recurring need Competitive environment

@rodrigoMrz

Great Market (ii)

Financial Services

Business data

Proprietary data

Pro Translation

Translators

Marketplace

@rodrigoMrz

Great Product

Building block Technically complex

Unfair advantage

Maintenance reqd

Unique assets

Great Product (ii) It Took 14-Months To Build

Stripe's Infrastructure

@rodrigoMrz

Great Team

Deep knowledge

Technical skills Communication skills

Dev evangelism

Fundraising

@rodrigoMrz

Great Team (ii)

Deep knowledge

Technical skills

Communication skills

Dev evangelism

Fundraising

@rodrigoMrz

Great business

Increasing complexity in APIs business models

Right pricing

• Freemium

• Pay-per-use / Subscription

• Price tiers

Right go-to-market

• Enterprise

• Self-service

• Inside sales

@rodrigoMrz

As-seen-in VC: Examples & Trends Fragmentation of Stacks

API prototyping

Vertical Enterprise APIs

Data Aggregation

APIs’ Consumption

for Dummies

Programable web

@rodrigoMrz

Dev Building Blocks

Thanks

www.pointninecap.com + Some say we have a pretty cool newsletter! ;)

Follow us on Twitter @rodrigoMrz | @PointNineCap

rodrigo@pointninecap.com