There are currently almost three million apps available in the Google Play store. There’s an abundance of fitness, food, productivity, dating, ride-sharing, delivery, shopping and community apps to choose from in the quest to make life healthier, easier and more meaningful.
It took approximately five years for the Play store to reach its first million apps and an additional six and a half years to triple that number, surpassing Apple’s App Store. In the 12 years since these two leading app stores debuted, they’ve had millions of apps downloaded hundreds of billions of times by users worldwide.
Don’t expect to see this trend slow down anytime soon. Apps have proven to satisfy a massive assortment of needs, and it has never been easier to build software that delivers delightful customer experiences.
Additionally, globalization and the ability to tap into developer talent anywhere in the world continue to help this mass proliferation. It has also been assisted significantly by the rise of the API economy, which deserves careful consideration, particularly in the wake of Visa’s $5.3 billion acquisition of Plaid and Stripe’s astronomical $250 million funding round.
The Emergence Of The API Economy
At the most basic level, the API economy is the emergence of higher-level services simplified and made accessible via an API, so that we can go from building apps to assembling them — from taking payments in any currency to zooming in on any street in the world to figuring out how many steps you walked last week and which groceries you bought on your way home from work. All of that information can be made available via an API to any app builder. If you can dream it, you can assemble it. To understand just how big of a revolution this is, let’s look at a few examples.
Recently, Plaid, a company that makes it simple to access financial accounts and transactions via its APIs, made waves when it got acquired by Visa for an eye-popping price of $5.3 billion. While this may seem like a large sum at first, if you think about what it made possible — the ability for any app to connect to almost any bank and access a user’s financial transactions — it no longer seems like such a stretch.
Any fintech, from personal budgeting to retirement planning to investing to mortgage origination, is going to need access to that banking data. Rather than all of those app developers figuring out the joys of integrating with a bank’s legacy infrastructure, they can now simply connect via Plaid.
Stripe is another example. In addition to its staggering $250 million raise in September, October saw Y Combinator update its most valued alumni list. Stripe, an API-centric company that makes it easy to accept payments and integrate those payments with your billing system, surprised some by topping Airbnb, with a valuation of $35 billion. These numbers are entering Dr. Evil-ransom territory. Let’s look at why.
Evolution Of The Web
In a way, APIs are the natural evolution of the web. First, things became “web-enabled,” which meant accessible via a browser from anywhere. Then, Salesforce led the way to the cloud. After that came the iPhone and a lot of chatter about mobile-first. We even briefly flirted with AI-first. All of this helped lead us to the era of the API economy.
With most services now available in the cloud and ready to be accessed on our phones, orchestrated by a smart algorithm, we’re only missing one thing: the ability for these services to talk to each other, share information and be strung together into experiences that make life easier and more convenient. That is why the API economy will continue to gain momentum.
In 2016, API companies were funded to the tune of $200 million, according to Crunchbase. Three years later, in 2019, that figure went up sevenfold to $1.38 billion. These companies create the building blocks that make the internet more than just the sum of its parts.
The API Wave
APIs do two really important things: They connect you to information and services you need and they do away with the complexity of building that service yourself. This is exactly what Plaid has done by making notoriously complex banking systems simple to talk to via an API. Plaid’s hard work of simplifying that process made it an incredibly popular and valuable company.
In the API economy, API companies are building the foundations of our digital experience. Companies such as Auth0 in identity management, Algolia for search, Segment for analytics, Mailgun for email, Foursquare for location data, Clearbit for data enrichment and Checkr for background checks are just some examples of the API wave that is quickly rising. My own company, SendBird, uses API for chat.
Want your dating app to recommend dates from your Facebook friends of friends list and then find an open spot on both of your calendars and book a table? That’s Hinge talking to Facebook APIs talking to Yelp APIs talking to Google Calendar APIs.
How about having your financial planning app automatically track your vacation travel spend and recommend cheaper destination options for your next trip? That’s Mint calling Citibank’s and Traveloka’s APIs. Maybe you watch a video of how a product works on a social selling site and then chat with the seller to finalize the sale. That’s possible because Carousell is talking to SendBird and Stripe.
The internet has graduated from logging people into different sites to access a piece of information like weather or stock prices to offering online services like ride-hailing, bill payment and fitness tracking, which can spring to life as a user needs or requests it. This requires data, services and devices. APIs accomplish that seamlessly.
APIs are taking off because they make incredible things possible without requiring the time and resources from the companies that understand how to leverage them. The world is changing via technology, and APIs are helping to drive that change.