Should you replace your developer portal with a hybrid integration platform?

The concept of a developer portal is to provide the necessary technical information to configure and manage the communication between an API and both internal and external systems. Originally, it was not thought of as a business-generating tool for companies that adopt them. Rather, it was an interface between APIs, SDKs and other digital tools and their administrators.

However, over time, many developer portal elements have caused friction for partners and resulted in higher costs for the company providing the data through APIs.

An alternative option to replace a developer portal is a Hybrid Integration Platform (HIP), a simple system connection solution that has the potential to generate more business through pairing ecosystems directly, efficiently and at a lower cost.

Fixing potential developer portal problems

The leading cause of friction within a developer portal is the amount of time it takes to create and support it. Quite often, an integration is delayed because the company providing the API is stuck waiting for support from the people they are working with.

To fulfill the demand for consumers in different stages of maturity, companies providing APIs later realized they needed to provide more data, new business cases and different mappings and transformations.

Once the portal and APIs adapt to the system, three key factors are necessary to provide a good user experience in the developer portal:

  1. Complete and easy-to-use documentation.
  2. Actionable and effective solution options.
  3. Quick response time.

Frequently, isolated and disconnected business challenges complicate developer portal implementations. To avoid such challenges, you should address these questions before the implementation process takes place:

  1. How can you ensure the business will benefit from the connection with partners, suppliers and customers?
  2. Is it possible to become more efficient, have lower integration costs and improve implementation and adoption times for technological solutions?
  3. How is innovation unlocked when previously unavailable data and services are made internally available?

When approaching a systems integration, it’s essential to develop a solution that considers business results first, before simplifying or removing any technical issues. Fixing predicted issues before they become problems only wastes time and takes the focus off the goal of making your business more efficient and profitable. Yet, many times we see the opposite happen — businesses tend to spend too much time fixing problems before they even occur.

Blissfully expands from SaaS management into wider IT services aimed at midmarket

When Blissfully launched in 2016, it was focused on helping companies understand their SaaS usage inside their organizations, but over time the company has seen that there is a wider need, especially in midmarket companies, and today it announced it was expanding into broader IT management.

Company co-founder and CEO Ariel Diaz says that the startup began helping to track SaaS usage, eventually expanding into employee onboarding and exiting, and today they are expanding into a broader set of IT services.

“Our vision when starting a company was really that IT is being redefined in the age of SaaS. So step one was to help with everything around managing SaaS. And step two is what does that mean in terms of the broader IT management vision,” Diaz told TechCrunch.

Blissfully believed that SaaS was going to take a bigger and bigger part of IT in terms of mindshare, spend and how you manage it, and they turned out to be right. Now, they felt the time is right to expand their original idea to encompass more of the IT management function.

That has resulted in a newly expanded platform they are releasing today that not only includes the earlier SaaS management components that it’s been providing all along, but also four other new categories.

For starters they are offering IT asset management. “We are now offering the ability to track not just SaaS applications, but all your IT assets including hardware devices and traditional software,” Diaz said.

Next, they are including help desk management and ticketing capabilities to handle requests that fall outside of their SaaS management workflows. In addition, they are adding role-based access control to allow different people access to various IT management services, which is increasingly essential during the pandemic as people are being forced to troubleshoot and manage various IT issues from home. Finally, the startup is opening up its APIs so that IT can tap into that and build customized functionality or workflows on top of the Blissfully platform.

Diaz believes that the company has reached a point of maturity when it comes to SaaS management, and they saw a need in the midmarket to provide these additional IT services that larger organizations tend to get from a company like ServiceNow.

The new services will be available starting today from Blissfully.

Investors, founders report hot market for API startups

Startups that deliver their service via an API are having a moment. Or perhaps a year.

Speaking with founders and investors this year, it has become clear that the API model of delivering a product is more than an occasional hit-maker for companies like Twilio or Plaid. Instead, it appears that there is ample room for lots of API-powered startups to build and prosper.

TechCrunch took note of a cluster of funding rounds for API-powered startups earlier this year, only to see more of the same as startups like Alpaca (equities trading via an API) reported massive growth and Noyo (APIs that link players in the health insurance market) raised new capital.

There’s more to come. Twilio’s Jeff Lawson told TechCrunch recently that “the world is getting broken down into APIs” as “every part of the stack of business that a developer might need to build is eventually turning into APIs that developers can use.”

We should expect to see more startups, then, pursuing the business model as time passes.

To dig deep into the API-focused startup space, we’ve done something unusual today. Instead of merely ringing a bunch of VCs to get their take — though we did that as well — we took the time for this survey to also bring a number of entrepreneurs into the conversation.

With two sets of questions targeted at each group, here’s who we corresponded with:

And they had a lot to say.

Big themes

We’ll limit ourselves to two themes from investors and two from founders. But don’t worry, as we’ve embedded full responses down below.

Starting with investors, our chief takeaway was that the money folks are bullish on not only the current generation of API-powered startups, but also on their future. We asked about the possible union between API-powered startups and low-code/no-code technologies. Our hunch was that as more folks can code in some manner, and APIs get better, there comes a day when nontraditional developers can leverage application programming interfaces.

That day, if it comes, could provide a huge boost to the startups in the space, right? Root VC’s Edward seems to think so. He answered our question about the possibility of nontraditional developers interacting with APIs in the future with an enthusiastic yes, adding that he believes that “eventually almost everyone will be a programmer, but that our definition of programmer will expand to fit a much broader range of activities.” That could mean lots more folks out there ingesting, using and paying for access to APIs that startups will be there to offer.

Even more, Edwards added that the same forces work in reverse, that “API-driven businesses enable low-code implementations and give superpowers to junior developers or people who don’t consider themselves developers at all.”

Shasta’s Roth agreed, saying that “these are highly related segments: low code and APIs.”

Our second investor takeaway is that it’s too simplistic to merely say that API-focused startups are going to be akin to SaaS startups in many ways, albeit with lower gross margins. They are not worse businesses than SaaS startups. Instead, they are different. Roth noted, for example, that API-delivered startups should have strong gross retention (logo retention), but that they may not have strong upselling power (net retention). Adding to the nuance of the conversation around economics, the Accel duo said that while API-powered startups may have “endemically lower” gross margins than SaaS startups, they also often feature “lower spend on sales and marketing and stronger net retention, both via lower churn and faster, bigger expansion.”

So, the net retention point is probably not fully settled yet, but what is clear is that our previous view of API startup economics is probably a bit simplistic.

From our trio of founders, two quick things. First, the venture capital community is as active as you’d expect, especially when it comes to preemption. Second, their startups tend to have improving economic profiles over time. The question for them then becomes how far they can run the gross margin numbers up before they go public.

We’ll see. You’ll find full answers below, lightly edited for clarity:

Isaac Roth, Shasta Ventures

Are API-delivered startups a plank in your firm’s general investment thesis? If so, why? 

Yes, very much. But making APIs an investing pillar is like making SaaS an investing pillar — it’s too broad. Rather, we have integrated the understanding that there is a shift to composable capabilities and that it is no longer the domain of custom expensive integrators to hook these capabilities together. The secret sauce is what industries will this affect in which ways, what are the opportunities that arise as a result, which types of APIs will be adopted first and last, of course, where does value lie?

We also see increasing use of APIs by enterprises leading to startups creating solutions for enterprises to manage, monitor and secure APIs and home-grown applications created using those APIs. 

Are you seeing most API-delivered startups in the market for capital today find new places to apply APIs, or are you seeing the majority of startups pursuing the model working inside of market areas known to be API-friendly? What market segment is the ripest for API-delivered startup disruption?

The unbundling of financial services, which makes way for innovation and personalized experiences is a great opportunity. That one is easier to realize. An underappreciated opportunity is in HR and corporate finance where monolithic applications integrate many functionalities that could benefit from evolving separately and could be knit together by each enterprise in a manner that is oriented toward their unique needs.

Security is another industry where every solution seems to have its own stovepipe interface and yet most CIOs and CISOs want integrated panes of glass. There will be low-code solutions for aggregation security information and response.   Additionally, we predict a significant increase in the use of APIs within enterprises and CISOs to look for solutions to manage access and threats emerging from these APIs.

Finally, think about commerce — a segment that has already benefited from the API economy — it was the original poster child for APIs and is finally catching up to that promise. However, because the nature of commerce is being accelerated due to COVID there is a lot of room left here.

Is the economic profile of API-delivered startups, especially from a gross-margin perspective, still on track to land one level below that of SaaS startups?

Until APIs have proprietary value by aggregating data (see my article about this in Programmable Web) the switching cost is lower than SaaS because there isn’t as much stickiness from needing to retrain a workforce if you switch. This means customers have more pricing power. Similarly, APIs enable competition because they define a standard interaction, and this causes lower margins. But keep reading for how to overcome this.

Does strong retention rates amongst API-delivered startups countermand their more limited gross margin profile?

Related to the above, a well-performing API will retain customers but it may not have as strong net retention as SaaS unless the API business can aggregate more value either beneath the API (more functionality) or around the API (management, integration, workflow, compliance, risk management, etc.).

YC grad DigitalBrain snags $3.4M seed to streamline customer service tasks

Most startup founders have a tough road to their first round of funding, but the founders of Digital Brain had it a bit tougher than most. The two young founders survived by entering and winning hackathons to pay their rent and put on food on the table. One of the ideas they came up with at those hackathons was DigitalBrain, a layer that sits on top of customer service software like Zendesk to streamline tasks and ease the job of customer service agents.

They ended up in Y Combinator in the Summer 2020 class, and today the company announced a $3.4 million seed investment. This total includes $3 million raised this round, which closed in August, and previously unannounced investments of $250,000 in March from Unshackled Ventures and $150,000 from Y Combinator in May.

The round was led by Moxxie Ventures with help from Caffeinated Capital, Unshackled Ventures, Shrug Capital, Weekend Fund, Underscore VC and Scribble Ventures along with a slew of individual investors.

Company co-founder Kesava Kirupa Dinakaran says that after he and his partner Dmitry Dolgopolov met at hackathon in May 2019, they moved into a community house in San Francisco full of startup founders. They kept hearing from their housemates about the issues their companies faced with customer service as they began scaling. Like any good entrepreneur, they decided to build something to solve that problem.

“DigitalBrain is an external layer that sits on top of existing help desk software to actually help the support agents get through their tickets twice as fast, and we’re doing that by automating a lot of internal workflows, and giving them all the context and information they need to respond to each ticket making the experience of responding to these tickets significantly faster,” Dinakaran told TechCrunch.

What this means in practice is that customer service reps work in DigitalBrain to process their tickets, and as they come upon a problem such as canceling an order or reporting a bug, instead of traversing several systems to fix it, they chose the appropriate action in DigitalBrain, enter the required information, and the problem is resolved for them automatically.  In the case of a bug, it would file a Jira ticket with engineering. In the case of canceling an order, it would take all of the actions and update all of the records required by this request.

As Dinakaran points out they aren’t typical Silicon Valley startup founders. They are 20 year old immigrants from India and Russia respectively, who came to the U.S. with coding skills and a dream of building a company. “We are both outsiders to Silicon Valley. We didn’t go to college. We don’t come from families of means. We wanted to come here and build our initial network from ground up,” he said.

Eventually they met some folks through their housemates, who suggested that they apply to Y Combinator. “As we started to meet people that we met through our community house here, some of them were YC founders and they kept saying I think you guys will love the YC community, not just in terms of your ethos, but also just purely from a perspective of meeting new people and where you are,” he said.

He said while he and his co-founder have trouble wrapping their arms around a number like the amount they have in the bank now, considering it wasn’t that long ago that they struggling to meet expenses every month, they recognize this money buys them an opportunity to help start building a more substantial company.

“What we’re trying to do is really accelerate the development and building of what we’re doing. And we think if we push the gas pedal with the resources we’ve gotten, we’ll be able to accelerate bringing on the next couple of customers, and start onboarding some of the larger companies we’re interested in,” he said.

Salesforce Ventures launches $100M Impact Fund to invest in cloud startups with social mission

When Salesforce Ventures launched the first $50 million Impact Fund in 2017, it wanted to invest not only in promising cloud businesses, but startups with a socially positive mission. Today, the company launched the second Impact Fund, this time doubling its initial investment with a new $100 million fund

The latest fund is also designed to help bring more investment into areas that the company feels needs to be emphasized as a corporate citizen beyond pure business goals including education and reskilling, climate action, diversity, equity and inclusion, and providing tech for nonprofits and foundations.

Suzanne DiBianca, Chief Impact Officer and EVP of Corporate Relations at Salesforce says the money is being put to work on some of the world’s most pressing social issues. “Now more than ever, we believe business can be a powerful platform for change. We must leverage technology and invest in innovative ideas to drive the long-term health and wellness of all citizens, enable equal access to education and fuel impactful climate action,” DiBianca said in a statement.

Brent Leary, founder and principal analyst at CRM Essentials says that this investment is consistent with their commitment to social issues. “This fits right in with Salesforce’s efforts on making business a force for change. They talk it, they walk it, and they invest in it,” Leary told TechCrunch.

Claudine Emeott, Director of Impact Investing, in a Q&A on the company website, said that as with the first fund, the company is looking for cloud companies with some ties to Salesforce that address these core social components and can have a positive impact on the world. While there is a social aspect to each company, it still follows a particular investment thesis related to cloud computing. Her goal is to have a portfolio of cloud startups by next year that are addressing the set of social needs the firm has laid out.

“I hope that [by next year] we have made numerous investments in companies that are addressing today’s concurrent crises, and I hope that we can point to their measurable impact on those crises. I hope that we can point to exciting new integrations between our portfolio companies and Salesforce to tackle these challenges together,” Emeott said.

Paul Greenberg, president of the 56 Group and author of CRM at the Speed of Light, says that while he doesn’t always agree with Salesforce on every matter, he admires their social bent. “As an analyst, I might battle with them on some of their products, the things they do in the market and their messaging, but as a human being, I applaud them for their deep commitment to the common good,” he said.

Salesforce has always had a social component to its corporate goals including its 1-1-1 philanthropy model. While Salesforce isn’t always completely consistent as with its contract with ICE, it does put money and personnel toward helping in the communities where it operates, encouraging volunteerism and charitable giving from the top down and modeled across the organization.

This investment fund, while looking at the investments through a distinctly Salesforce lens, is designed to fund startups to help solve intractable social problems, while using its extensive financial resources for the betterment of the world.

Scratchpad announces $3.6M seed to put work space on top of Salesforce

One thing that annoys sales people is entering data into a CRM like Salesforce because it’s time spent not selling. Part of the problem is Salesforce is a database and as such is not necessarily designed for speed. Scratchpad wants to simplify that process by creating a workspace on top of the CRM to accelerate the administrative side of the job.

Today, the company announced a $3.6 million seed round led by Accel with participation from Shrug Capital and Sound Ventures, the firm run by Ashton Kutcher and Guy Oseary, as well as several individual investors. The round, which closed at the end of last year, hadn’t been previously announced.

Last year, company co-founder and CEO Pouyan Salehi had just stepped down from his previous company PersistIQ, a sales enablement startup that came out of Y Combinator in 2014. He and his co-founder Cyrus Karbassiyoon began researching a new company, and the idea for Scratchpad came to them when they simply sat down and watched how salespeople were working. They noted that they were using a hodgepodge of tools like taking notes in Evernote or Google Docs, tracking their pipeline in Excel or Google Sheets and tracking tasks with paper lists or sticky notes.

They recognized that these tools were disconnected from Salesforce and required hours of manual work copying and pasting this data. That’s when they saw there was an opportunity here to build a tool to track all of this information in one place and connect it to Salesforce to automate a lot of this grunt work.

“It eventually evolved into this idea that we’re calling “The Workspace” because everyone has Salesforce, but they are working with all of these other tools that then they just have to literally spend hours — and we saw some reps block off four hour chunks on their calendar — just to copy and paste from their documents, spreadsheets or notes into Salesforce for their pipeline reviews. And that’s how the idea for Scratchpad came to be,” Salehi told TechCrunch.

Today, a salesperson can install Scratchpad as a Chrome plug-in, connect to Salesforce with their log-in credentials and create a two-way connection between the tools. Scratchpad pulls all of their pipeline data into the WorkSpace. They can cycle through the various fields to enter information quickly, enter notes and track tasks (which can be pulled from email and calendar) all in one place.

What’s more, because all of this information is linked to Salesforce, anything you enter in Scratchpad updates the corresponding fields and sections in Salesforce automatically. And any new opportunities that start in Salesforce update in Scratchpad.

The company has been operating for about a year and has 1000s of users, although many are currently using the free tier. It has 7 employees with plans to hire more over the next year. As he builds his second company, Salehi says he and his co-founder are building on a foundation of diversity and inclusion.

“By nature, we are very diverse in many different perspectives that you can look at including gender, age, location and backgrounds,” he said. He adds that building a diverse and inclusive workforce is important to the company.

“And so even in our hiring process, we incorporated certain elements just to make sure that we’re not introducing bias in any sort of way, or at least recognizing that the natural bias and thoughts we might have. We look at things like doing blind looks at resumes and it’s something that we take very, very seriously,” he said.

While the company is built on top of Salesforce today, he says it could expand to include other databases or sources of information where the product could also work. For now though, he sees an opportunity to build another company in the sales arena to help reduce the amount of work associated with updating the CRM database.

Chargebee raises $55 million to help businesses move to subscriptions

Chargebee, which helps businesses set up and manage their billing, subscription, revenue operations and compliance, said on Tuesday it has raised $55 million in a new financing round as it looks to accelerate its expansion in global markets.

The new financing round, a Series F, for the San Francisco and Chennai-based firm was led by Insight Partners with existing investors Steadview Capital and Tiger Global participating in it. The nine-year-old startup, which kickstarted its journey in India, has raised $105 million to date.

For businesses, setting up and managing subscription service is a complex process. How do you manage the billing when your customers are on a free trial or want to change their subscription plan, for instance? This is where Chargebee comes into the picture.

Chargebee allows individuals, small businesses, and enterprises to automate subscriptions, billing, invoicing, payments and revenue recognition processes. It supports dozens of popular payment gateways including Stripe, Braintree, WorldPay, and PayPal and its global tax management coverage also helps businesses to expand to new markets. MakeSpace, an on-demand storage company, used Chargebee’s services to scale from four markets to 31 in one year, for instance.

The startup offers its services through a range of pricing schemes, including those that vary based on usage and it is able to renew billing cycles based on sign-up dates or other specific parameter. It can also selectively route payments and currencies to predefined rules. On the backend, Chargebee customers get a visual organizational chart of their customers and can easily define payment and invoicing responsibilities.

The startup told TechCrunch that businesses across the globe are moving to adopt a subscription model, which has made its platform more crucial than ever. Over 2,500 businesses including Freshworks, Calendly, Linux Academy, Fujitsu, Okta, and Envoy are clients of Chargebee. (The startup had about 1,800 clients last year.)

Additionally, several businesses and individuals have signed up to the platform in recent months as they navigate the global pandemic. Some of these customers include individuals like teachers and small coffee chains.

Pret-a-manger, a coffee and sandwich super chain, went live with Chargebee after its physical stores were hit by the coronavirus outbreak. It sold 165,000 coffee subscriptions on the launch day.

AJ Malhotra, Vice President at Insight Partners, said there’s a global movement underway where businesses from cars to coffee pods are launching and scaling with a subscription-first model.

The adoption of subscription model has become popular in recent years as businesses from a range of categories including e-commerce and media look to better monetize their services.

“We believe that a steady SaaS-i-fication of the market is already underway, with traditional businesses replicating the best practices of SaaS pricing and business models even outside the realm of software. Subscription businesses today have to be ready at all times to identify and leverage market opportunities rapidly,” said Krish Subramanian, co-founder and CEO of Chargebee, in a statement.

What’s more, the startup provides its subscription invoicing service to customers at no charge until they reach $50,000 in revenue — something it plans to broaden in coming days. Chargebee says it processes over $3 billion in revenue each year.

Chargebee, which also has offices in Chennai, Amsterdam, Salt Lake City, and Sydney and customers in over 160 countries, plans to use the fresh capital to further grow its footprints in international markets, an executive told TechCrunch.

Embedded finance might represent fintech’s future

The fintech industry is on a tear. Popular consumer services like Robinhood to Coinbase and Revolut have managed to attract millions of customers, but the most interesting trend right now is embedded finance.

Tech companies that don’t necessarily provide financial services can embed services from fintech companies directly in their products. At the same time, fintech companies can find a new distribution channel by providing financial products outside of their main product. They don’t necessarily need a consumer product anymore.

At TechCrunch Disrupt, we talked about this trend and the most important changes in the fintech industry with three experts — Hope Cochran, a managing director at Madrona Venture Group (and former King CFO), Ruth Foxe Blader, a partner at Anthemis, and John Locke, a partner at Accel.

Banking as a service: Every tech company is potentially a fintech company

We started the conversation by talking about banking as a service. For entrepreneurs hoping to launch a fintech company, there are many regulatory requirements and it can take a while to set up the infrastructure.

“If the intention is to offer something else and it happens that you need fintech infrastructure, then it makes no sense to build it yourself,” Cochran said. “They should utilize the banking-as-a-service model. But maybe their intention is to create a true fintech and the secret sauce is to build it.”

Even in the latter case, it doesn’t mean that founders shouldn’t consider banking as a service for the very beginning of their company, as it can serve as a bridge before switching to their own infrastructure.

“But the problem with building it yourself is that it takes years to get it out there and get through the regulatory hurdles and you can’t see if your product and idea are actually working. So if you want to get to market much faster and iterate and see if you’ve hit upon something that will work on the market, I think banking as a service is a really important tool,” Cochran said.

Locke doubled down on that idea and described banking as a service as a massive opportunity for an entire wave of entrepreneurs, but if you don’t launch your product fast enough, another entrepreneur will find a way to enter the market more quickly.

Asana’s strong direct listing lights alternative path to public market for SaaS startups

This week’s pair of direct listings from Asana and Palantir were historic moments for each firm, but they also served as public business experiments.

For Palantir, the event tested how far corporate governance could be twisted while leaving an underlying remain worth buying in the eyes of public shareholders. And with Asana, its direct listing was a test of what sort of tech company can go public using the mechanism.

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Asana is not as well-known as Spotify was during its famous direct listing, nor is it growing as quickly as Slack was when it also went public using the method. But Asana had charm of its own, including good growth. The question surrounding its debut was what sort of price it could secure given its rising losses and operating cash burn, and whether it would prove attractive enough to serve as a positive harbinger for yet-private SaaS startups.

How would investors react when it started to trade? Favorably, as it turns out.

Asana’s results augur well for other SaaS startups that may not find the traditional IPO process enticing but don’t want to wager their public debut on more exotic mechanisms like blank-check companies, especially the bulk of late-stage SaaS unicorns that are still cash-hungry and far from profitable on a GAAP basis.

Asana’s debut, then, is a lit torch for late-stage SaaS startups that have access to private cash and want to trade publicly.

A direct listing success

There was much to like in Asana’s IPO filing, along with a few cautionary notes. To avoid a full recap of our prior reporting, we’ll skate through only the most salient details as reminders.

American stocks drop in wake of President’s COVID-19 diagnosis

American stocks are selling in the wake of President Trump, and members of his family and a key staff member, testing positive for COVID-19.

The news, which came overnight, is weighing heavily on all major American indices, but heaviest on tech shares. As of the time of writing, here’s where the mess stands:

  • Dow Jones Industrial Average: Futures off 1.5%
  • S& 500: Futures off 1.63%
  • Nasdaq Composite: Futures off 2.32%

Smaller, and more specific baskets of equities like the Bessemer cloud index do not release similar pre-market numbers, so we cannot see the precise impact that the news, and the potential political destabilization that it may bring, are having on the shares of the tech industry that have flown the highest.

But we can see around the edges: Datadog is off 2.9%. Salesforce is off 1.8%. Zoom is off 1.7%. Crowdstrike is off 3.2%, and so forth. In short, it doesn’t appear that SaaS and cloud stocks are faring better than tech stocks more broadly.

Recent direct listings Palantir and Aasana are off 3.8% and 3.4%, respectively, in pre-market trading. Other recent IPOs are down as well, including JFrog (off 5.8% before the bell), and Snowflake (off 4.6% in pre-market trading).

It’s not hard to guess why the stock market is suffering in the wake of the President’s diagnosis. This close to an already volatile election, complicating factors are deleterious to investor confidence. That’s bad for stocks. And it would be a good moment to have a fully healthy President to help get another round of stimulus done. That package could be undercut by today’s chaos. And on and on.

TechCrunch will keep an eye on the markets as the day continues, but don’t expect your personal accounts to look better at the day’s end than the beginning.