Join us for a live Q&A with Plaid CEO Zach Perret June 18th at 10 am PT/1 pm ET

Extra Crunch Live, TechCrunch’s chat series for Extra Crunch members, is tacking towards founders after bringing on a host of investors: on Thursday, June 18, Plaid CEO Zach Perret will join us for a conversation.

Plaid, known for APIs that connect fintech applications with users’ bank accounts, came to prominence in late 2018 when it closed a massive $250 million Series C. The round — TechCrunch’s coverage from the time is here — brought the value of the company to $2.65 billion on a post-money basis.

Payments and credit giant Visa bought Plaid earlier this year for $5.3 billion, a neat doubling from its preceding valuation, and a price that was an even greater multiple of its valuation at the time of its Series B and earlier rounds.

Plaid is at the epicenter of a few trends, including fintech’s recent savings and investing boom and the recent VC rush to fund API-focused startups, so our conversation will cover a good amount of ground, including fintech trends, selling a company instead of taking it public, the power of APIs and more. But because this is Extra Crunch Live, we want to hear from you as well. As always, we’ll keep an eye on the Q&A portion of the Zoom and will work in your notes as we go.

Extra Crunch subscribers, hit the jump to add the event to your calendar and save the Zoom link. YouTube information to come. If you aren’t part of Extra Crunch yet, you can get an inexpensive trial here.

See you all there!

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Health APIs usher in the patient revolution we have been waiting for

If you’ve ever been stuck using a health provider’s clunky online patient portal or had to make multiple calls to transfer medical records, you know how difficult it is to access your health data.

In an era when control over personal data is more important than ever before, the healthcare industry has notably lagged behind — but that’s about to change. This past month, the U.S. Department of Health and Human Services (HHS) published two final rules around patient data access and interoperability that will require providers and payers to create APIs that can be used by third-party applications to let patients access their health data.

This means you will soon have consumer apps that will plug into your clinic’s health records and make them viewable to you on your smartphone.

Critics of the new rulings have voiced privacy concerns over patient health data leaving internal electronic health record (EHR) systems and being surfaced to the front lines of smartphone apps. Vendors such as Epic and many health providers have publicly opposed the HHS rulings, while others, such as Cerner, have been supportive.

While that debate has been heated, the new HHS rulings represent a final decision that follows initial rules proposed a year ago. It’s a multi-year win for advocates of greater data access and control by patients.

The scope of what this could lead to — more control over your health records, and apps on top of it — is immense. Apple has been making progress with its Health Records app for some time now, and other technology companies, including Microsoft and Amazon, have undertaken healthcare initiatives with both new apps and cloud services.

It’s not just big tech that is getting in on the action: startups are emerging as well, such as Commure and Particle Health, which help developers work with patient health data. The unlocking of patient health data could be as influential as the unlocking of banking data by Plaid, which powered the growth of multiple fintech startups, including Robinhood, Venmo and Betterment.

What’s clear is that the HHS rulings are here to stay. In fact, many of the provisions require providers and payers to provide partial data access within the next 6-12 months. With this new market opening up, though, it’s time for more health entrepreneurs to take a deeper look at what patient data may offer in terms of clinical and consumer innovation.

The incredible complexity of today’s patient data systems

Salesforce announces new tools to boost developer experience on Commerce Cloud

Salesforce announced some new developer tools today, designed to make it easier for programmers to build applications on top of Commerce Cloud in what is known in industry parlance as a “headless” system.

What that means is that developers can separate the content from the design and management of the site, allowing companies to change either component independently.

To help with this goal, Salesforce announced some new and enhanced APIs that enable developers take advantage of features built into the Commerce Cloud platform without having to build them from scratch. For instance, they could take advantage of Einstein, Salesforce’s artificial intelligence platform, to add elements like next-best actions to the site, the kind of intelligent functionality that would typically be out of reach of most developers.

Developers also often need to connect to other enterprise systems from their eCommerce site to share data with these tools. To fill that need, Salesforce is taking advantage of Mulesoft, the company it purchased almost two years ago for $6.5 billion. Using Mulesoft’s integration technology, Salesforce can help connect to other systems like ERP financial systems or product management tools and exchange information between the two systems.

Brent Leary, founder at CRM Essentials, whose experience with Salesforce goes back to its earliest days, says this about helping give developers the tools that they need to create the same kind of integrated shopping experiences consumers have grown to expect from Amazon.

“These tools give developers real-time insights delivered at the “moment of truth” to optimize conversion opportunities, and automate processes to improve ordering and fulfillment efficiencies. This should give developers in the Salesforce ecosystem what they need to deliver Amazon-like experiences while having to compete with them.” he said.

To help get customers comfortable with these tools, the company also announced a new Commerce Cloud Development Center to access a community of developers who can discuss and share solutions with one another, an SDK with code samples and Trailhead education resources.

Salesforce made these announcement as part of the National Retail Foundation (NRF) Conference taking place in New York City this week.

18 months after acquisition, MuleSoft is integrating more deeply into Salesforce

A year and a half after getting acquired by Salesforce for $6.5 billion, MuleSoft is beginning to resemble a Salesforce company — using its language and its methodologies to describe new products and services. This week at Dreamforce, as the company’s mega customer conference begins in San Francisco, MuleSoft announced a slew of new services as it integrates more deeply into the Salesforce family of products.

MuleSoft creates APIs to connect different systems together. This could be quite useful for Salesforce as a bridge between older software that may be on-prem or in the cloud. It allows Salesforce and its customers to access data wherever it lives, even from different parts of the Salesforce ecosystem itself.

MuleSoft made a number of announcements designed to simplify that process and put it in the hands of more customers. For starters, it’s announcing Accelerators, which are pre-defined integrations that let companies connect more easily to other systems. Not surprisingly, two of the first ones connect data from external products and services to Salesforce Service Cloud and Salesforce Commerce Cloud.

“What we’ve done is we’ve pre-built integrations to common back-end systems like ServiceNow and JIRA in Service Cloud, and we prebuilt those integrations, and then automatically connected that data and services through a Salesforce Lightning component directly in the Service console,” Lindsey Irvine, chief marketing officer at MuleSoft, explained.

What this does is allow the agent to get a more complete view of the customer by getting not just the data that’s stored in Salesforce, but in other systems as well.

The company also wants to put these kinds of integration skills in the hands of more Salesforce customers, so they have designed a set of courses in Trailhead, the company’s training platform, with the goal of helping 100,000 Salesforce admins, developers, integration architects and line of business users develop expertise around creating and managing these kinds of integrations.

The company is also putting resources into creating the API Community Manager, a place where people involved in building and managing these integrations can get help from a community of users, all built on Salesforce products and services, says Mark Dao, chief product officer at MuleSoft.

“We’re leveraging Community Cloud, Service Cloud and Marketing Cloud to create a true developer experience platform. And what’s interesting is that it’s targeting both the business users — in other words, business development teams and marketing teams — as well as external developers,” he said. He added that the fact this is working with business users as well as the integration experts is something new, and the goal is to drive increased usage of APIs using MuleSoft inside Salesforce customer organizations.

Finally, the company announced Flow Designer, a new tool fueled by Einstein AI, which helps automate the creation of workflows and integrations between systems in a more automated fashion without requiring coding skills.

MuleSoft Flow Designer requires no coding (Screenshot: MuleSoft)

Dao says this is about putting MuleSoft in reach of more users. “It’s about enabling use cases for less technical users in the context of the MuleSoft Anypoint Platform. This really requires a new way of thinking around creating integrations, and we’ve been making Flow Designer simpler and simpler, and removing that technical layer from those users,” he said.

API Community Manager is available now. Accelerators will be available by the end of the year and Flow Designer updates will be available Q2 2020, according to the company.

These and other features are all designed to take some of the complexity out of using MuleSoft to help connect various systems across the organization, including both Salesforce and external programs, to make use of data wherever it lives. MuleSoft does requires a fair bit of technical skill, so if the company is able to simplify integration tasks, it could help put it in the hands of more users.

Passbase grabs $3.6M to power privacy-preserving online ID checks

Digital identity startup Passbase has closed a $3.6 million seed round, led by Cowboy Ventures and Eniac Ventures, with participation from Seedcamp and other European investors.

The 2018 founded startup bagged a $600k pre-seed round earlier this year for its full-stack identity engine with a privacy twist.

The latest tranche of funding will go on growing the team and sales channels in the US and Europe, says co-founder Mathias Klenk. “Our goal is to build an API-first company, so building a strong core organization is key for us to be able to fully focus on securing partnerships with complementary services,” he tells TechCrunch.

“By the end of next year, we aim to have our consumer application rolled out so that individuals can leverage the core value proposition of our service and businesses can reap the rewards of seamless reauthentication,” he adds. In terms of clients, our goal is to move up in scale and conduct pilots with some of the larger players in our target segment.”

Passbase launched an open beta in May and has been running tests over the summer, according to Klenk, who says around 15 companies have been actively testing the platform — claiming 300+ businesses have “expressed interest” in the product.

Earlier testers hail from industries including healthcare, gig economy and mobility, with “exciting use cases in the pipeline from recruitment to financial services that will launch soon”, per Klenk.

What is the product? Passbase dubs it ‘Stripe for identity verification’ — meaning it’s offering APIs to make it easy for developers to plug and integrate a range of consumer-friendly identity checks into their digital services. Such as selfie video scans and identity document scanning. (Passbase is itself plugging into ID document verification services from a range of partners, augmented with add-ons such as a liveness check.)

It touts “NIST-certified facial recognition, forensic ID authenticity analysis, and a patent-pending zero-knowledge sharing architecture” as forming part of its stack. 

The overarching goal is to become a trusted intermediary exchange later between businesses and end users — aka a “consent layer” — by building out a developer platform to support the integration of verification technologies into web services, while — on the consumer end — allowing web users to limit who gets access to their actual data. Hence the promise of privacy baked in.

“Our vision is to build out an open identity system that encourages services to hold less information, yet be sure of the quality of the result they are receiving,” adds Klenk.

Consumers can submit personal data to verify their ID, such as a facial biometric scan and identity document scan via their webcam, without having to rely on their data being exposed to and potentially mishandled by non-specialists — instead they have to trust Passbase’s tech architecture.

It also plans to launch a (free) consumer app early next year that will provide end users with controls over the information they’re sharing for ID verification and also serve up insights on how it’s being used — to give people “a holistic view and analytics of their data exposure online”, as Klenk puts it. 

Though it won’t be requiring such highly engaged participation from end users — to ‘claim their digital identity’ by downloading its app.

“Our aim is to incorporate your digital identity into the verification flow,” he says, adding: “If you do not care enough about your digital footprint, you do not have to claim your digital identity and can process through a transactional relationship like with any other identity verification provider. However, with a combination of your biometrics and unique identifier, we have the first building blocks of creating a universal digital identity.”

Klenk says he expects access management and account recovery to become an important area for Passbase as — or, well, if — consumers adopt its idea of a “verified digital identity” which they can control.

“In terms of businesses accepting this, of course there are network effects in play,” he goes on. “That being said, identity works as a stack and if we manage to tie the root identity to additional credentials (through partnerships) like background checks, credit scores etc, it would be difficult to pass on using such a system. So at the end of the day, it comes down to who can offer the most full-stack solution.”

There’s plentiful and growing competition in the digital identity management space — including for privacy-protecting sign-ins now Apple has skin in the game — so Passbase certainly has its work cut out to get traction. Though it’s targeting fuller ID checks, arguing that a username and password are inadequate for many of the authentication checks which digital services now demand, given there’s a platforms offering to connect you to pretty much anyone these days, be it a medical professional, babysitter, taxi driver, cleaner, delivery driver or potential life partner.

Klenk says Passbase’s defensibility “comes from the B2B2C approach whereby we are creating a useful service for businesses from day 1, while enabling data ownership for consumers in order to create a more secure and privacy-preserving digital future”.

It does also have patents pending in the US.

“For some of the incumbents in the market, it is complicated to completely shift their business model, whereas for newer competitors, it comes down to the operating model and execution,” he also argues of the competitive landscape.

If Passbase can make their full-stack stick, the plan is to monetize via the developer platform where they’ll offer businesses their first 50 verifications for free.

“Afterwards, our pricing has a platform access fee combined with a per verification cost. The reason being that as we build out more and more modules (ID document verification, phone number, living address, email, work permit) we plan to move towards a SaaS model, offering businesses all kinds of identification services for a predictable cost,” he says. “This is why our pricing also reflects a lower variable cost and increased subscription fee, as volumes grow.”

A self-service b2b product will launch next month — meaning any business will be able to tap Passbase’s APIs and integrate its verification service. The consumer app will naturally follow later.

“For the consumer, the product will always be free as we believe that the data needs to be given back and belong to consumers,” Klenk adds.

Plaid announces strategic investment from Mastercard and Visa

When Plaid announced its $250 million Series C investment, last year, it left out a couple of key investors. Today it revealed that Mastercard and Visa had also quietly participated in the round.

For a company like Plaid, which builds APIs to enable customers to access their bank accounts inside applications in a seamless way, having the blessing of two of the major credit companies in the world is a big deal. It could signal that the startup intends to move more broadly into payments, although it didn’t make any specific assertion it was doing that in the announcement.

CEO and co-founder Zach Perret, writing in a blog post this morning, addressed the broad implications of having these companies on board. “We’re particularly excited about what this means for our customers and consumers. As an industry when we come together with a shared vision for an ecosystem that is open, secure and encouraging of innovation the possibilities are limitless,” he wrote.

Screenshot 2019 09 16 07.44.17

Plaid tools

Plaid helps developers connect to financial services in a similar way that Stripe helps them to connect to payments or Trello to communications tools. By having access to a set of tools from Plaid, developers can build access to bank information and other financial data into their applications without having to have knowledge about how to connect to thousands of different banking systems.

Former CTO and co-founder William Hockey explained to TechCrunch what this meant in an announcement earlier this year:

“Everybody in the U.S. can actually use this product now. And some of those [connections] are super quick and instant, and some of those maybe take a day to verify, but what we’re doing is we’re wrapping all of that in the product. And so you as a developer, you don’t have to worry about all of the different authentication methods at some of these banks,” Hockey explained.

Plaid has raised over $310 million since it launched, and that Series C investment last year carried with it a fat $2.65 billion valuation. Strategic investments of this sort show that the industry as a whole is behind a startup, and having Mastercard and Visa involved, gives the company additional credibility in the marketplace.

APIs are the next big SaaS wave

While the software revolution started out slowly, over the past few years it’s exploded and the fastest-growing segment to-date has been the shift towards software as a service or SaaS.

SaaS has dramatically lowered the intrinsic total cost of ownership for adopting software, solved scaling challenges and taken away the burden of issues with local hardware. In short, it has allowed a business to focus primarily on just that — its business — while simultaneously reducing the burden of IT operations.

Today, SaaS adoption is increasingly ubiquitous. According to IDG’s 2018 Cloud Computing Survey, 73% of organizations have at least one application or a portion of their computing infrastructure already in the cloud. While this software explosion has created a whole range of downstream impacts, it has also caused software developers to become more and more valuable.

The increasing value of developers has meant that, like traditional SaaS buyers before them, they also better intuit the value of their time and increasingly prefer businesses that can help alleviate the hassles of procurement, integration, management, and operations. Developer needs to address those hassles are specialized.

They are looking to deeply integrate products into their own applications and to do so, they need access to an Application Programming Interface, or API. Best practices for API onboarding include technical documentation, examples, and sandbox environments to test.

APIs tend to also offer metered billing upfront. For these and other reasons, APIs are a distinct subset of SaaS.

For fast-moving developers building on a global-scale, APIs are no longer a stop-gap to the future—they’re a critical part of their strategy. Why would you dedicate precious resources to recreating something in-house that’s done better elsewhere when you can instead focus your efforts on creating a differentiated product?

Thanks to this mindset shift, APIs are on track to create another SaaS-sized impact across all industries and at a much faster pace. By exposing often complex services as simplified code, API-first products are far more extensible, easier for customers to integrate into, and have the ability to foster a greater community around potential use cases.

Screen Shot 2019 09 06 at 10.40.51 AM

Graphics courtesy of Accel

Billion-dollar businesses building APIs

Whether you realize it or not, chances are that your favorite consumer and enterprise apps—Uber, Airbnb, PayPal, and countless more—have a number of third-party APIs and developer services running in the background. Just like most modern enterprises have invested in SaaS technologies for all the above reasons, many of today’s multi-billion dollar companies have built their businesses on the backs of these scalable developer services that let them abstract everything from SMS and email to payments, location-based data, search and more.

Simultaneously, the entrepreneurs behind these API-first companies like Twilio, Segment, Scale and many others are building sustainable, independent—and big—businesses.

Valued today at over $22 billion, Stripe is the biggest independent API-first company. Stripe took off because of its initial laser-focus on the developer experience setting up and taking payments. It was even initially known as /dev/payments!

Stripe spent extra time building the right, idiomatic SDKs for each language platform and beautiful documentation. But it wasn’t just those things, they rebuilt an entire business process around being API-first.

Companies using Stripe didn’t need to fill out a PDF and set up a separate merchant account before getting started. Once sign-up was complete, users could immediately test the API with a sandbox and integrate it directly into their application. Even pricing was different.

Stripe chose to simplify pricing dramatically by starting with a single, simple price for all cards and not breaking out cards by type even though the costs for AmEx cards versus Visa can differ. Stripe also did away with a monthly minimum fee that competitors had.

Many competitors used the monthly minimum to offset the high cost of support for new customers who weren’t necessarily processing payments yet. Stripe flipped that on its head. Developers integrate Stripe earlier than they integrated payments before, and while it costs Stripe a lot in setup and support costs, it pays off in brand and loyalty.

Checkr is another excellent example of an API-first company vastly simplifying a massive yet slow-moving industry. Very little had changed over the last few decades in how businesses ran background checks on their employees and contractors, involving manual paperwork and the help of 3rd party services that spent days verifying an individual.

Checkr’s API gives companies immediate access to a variety of disparate verification sources and allows these companies to plug Checkr into their existing on-boarding and HR workflows. It’s used today by more than 10,000 businesses including Uber, Instacart, Zenefits and more.

Like Checkr and Stripe, Plaid provides a similar value prop to applications in need of banking data and connections, abstracting away banking relationships and complexities brought upon by a lack of tech in a category dominated by hundred-year-old banks. Plaid has shown an incredible ramp these past three years, from closing a $12 million Series A in 2015 to reaching a valuation over $2.5 billion this year.

Today the company is fueling an entire generation of financial applications, all on the back of their well-built API.

Screen Shot 2019 09 06 at 10.41.02 AM

Graphics courtesy of Accel

Then and now

Accel’s first API investment was in Braintree, a mobile and web payment systems for e-commerce companies, in 2011. Braintree eventually sold to, and became an integral part of, PayPal as it spun out from eBay and grew to be worth more than $100 billion. Unsurprisingly, it was shortly thereafter that our team decided to it was time to go big on the category. By the end of 2014 we had led the Series As in Segment and Checkr and followed those investments with our first APX conference in 2015.

Plaid, Segment, Auth0, and Checkr had only raised Seed or Series A financings! And we are even more excited and bullish on the space. To convey just how much API-first businesses have grown in such a short period of time, we thought it would be useful perspective to share some metrics over the past five years, which we’ve broken out in the two visuals included above in this article.

While SaaS may have pioneered the idea that the best way to do business isn’t to actually build everything in-house, today we’re seeing APIs amplify this theme. At Accel, we firmly believe that APIs are the next big SaaS wave — having as much if not more impact as its predecessor thanks to developers at today’s fastest-growing startups and their preference for API-first products. We’ve actively continued to invest in the space (in companies like, Scale, mentioned above).

And much like how a robust ecosystem developed around SaaS, we believe that one will continue to develop around APIs. Given the amount of progress that has happened in just a few short years, Accel is hosting our second APX conference to once again bring together this remarkable community and continue to facilitate discussion and innovation.

Screen Shot 2019 09 06 at 10.41.10 AM

Graphics courtesy of Accel

Plaid puts Quovo acquisition right to work with new investments product

When Plaid acquired Quovo earlier this year, it was clear the company wanted to move beyond checking and savings data to a broader view of investments. Today, the company announced Investments, an API based on Quovo, that enables customers to pull investment data into their apps.

Lowell Putnam, head of partnerships at Plaid and former CEO and co-founder at Quovo, says there has been a hunger for this kind of data from customers and developers, and the Quovo purchase helped accelerate that inside Plaid .

“I think that the origins of the product comes from a company that I co-founded and also broader demand that Plaid has seen in the past several years. It shouldn’t come as a surprise that a lot of our customers want the full 360-degree view of their clients,” Putnam told TechCrunch.

An investment account provides unique challenges over a checking or savings account, which has a certain amount of cash at any given time.”Instead of owning just cash in an account, investment accounts hold multiple securities in the same accounts, and the securities change in value, regardless of [whether you engage in trade activity or not], Putnam said.

Plaid sees this capability greatly expanding how developers use their APIs moving forward. “With connectivity to investment accounts, Plaid can serve a whole new set of use cases to enable developers, technology platforms, and financial institutions to deliver more insightful and compelling products,” the company wrote in a blog post announcing the new product.

He says the two companies recognized the power of bringing this kind of information into any financial application, even before the acquisition, and they have been working hard to make it happen since. “We realized that we have the opportunity to bring Quovo’s investment data expertise into the Plaid API stack, and do that with all of the tweaks and changes and enhancements that we’ve both been thinking about for the past several years,” he said.

The new product is available in the U.S. starting today. It will be rolled out in other regions throughout the year.

Apigee jumps on hybrid bandwagon with new API for hybrid environments

This year at Google Cloud Next, the theme is all about supporting hybrid environments, so it shouldn’t come as a surprise that Apigee, the API company it bought in 2016 for $265 million, is also getting into the act. Today, Apigee announced the beta of Apigee Hybrid, a new product designed for hybrid environments.

Amit Zavery, who recently joined Google Cloud after many years at Oracle, and Nandan Sridhar, describe the new product in a joint blog post as “a new deployment option for the Apigee API management platform that lets you host your runtime anywhere—in your data center or the public cloud of your choice.”

As with Anthos, the company’s approach to hybrid management announced earlier today, the idea is to have a single way to manage your APIs no matter where you choose to run them.

“With Apigee hybrid, you get a single, full-featured API management solution across all your environments, while giving you control over your APIs and the data they expose and ensuring a unified strategy across all APIs in your enterprise,” Zavery and Sridhar wrote in the blog post announcing the new approach.

The announcement is part of an overall strategy by the company to support a customer’s approach to computing across a range of environments, often referred to as hybrid cloud. In the Cloud Native world, the idea is to present a single fabric to manage your deployments, regardless of location.

This appears to be an extension of that idea, which makes sense, given that Google was the first company to develop and open-source Kubernetes, which is at the forefront of containerization and Cloud Native computing. While this isn’t pure Cloud Native computing, it is keeping true to its ethos and it fits in the scope of Google Cloud’s approach to computing in general, especially as it is being defined at this year’s conference.

Mailgun changes hands again as Thoma Bravo buys majority stake

Mailgun, an email API delivery service, announced today that it was selling a majority stake in the company to private equity firm Thoma Bravo. The companies did not share terms, but this is the second owner in the company’s 8+ year history.

Mailgun provides API services for building email functionality into applications. It has over 150,000 customers today using its APIs, according to data provided by the company.

In a blog post announcing the investment, CEO William Conway said the new money should help the company expand its capabilities and accelerate the product roadmap, a common refrain from companies about to be acquired.

“We will be investing millions in the development of products you can use to enhance your deliverability, gain more insights into your emails and deliver an unparalleled experience for your customers. We’re also doubling down on customer success and enablement to ensure our customers have exactly what they need to scale their communications,” Conway wrote in the blog post.

The company, which was founded in 2010 and was a part of the Y Combinator Winter 2011 cohort, has had a complex history. Rackspace acquired it in 2012 and held onto it until 2017 when it spun out into a private company. At that point, Turn/River, another private equity firm,  invested $50 million in the company. After today’s deal, Turn/River will maintain a minority ownership stake in Mailgun.

Mailgun typically competes with companies like MailChimp and SendGrid. Thoma Bravo has a history buying enterprise software companies. Most recently, it bought a majority stake in enterprise software company Apttus. It also has investments in SolarWinds, SailPoint and Blue Point Systems.

Thoma Bravo did not respond to a request for comment before publishing.