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5/5/2011
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Mashery Raises $11 Million For API Management

OpenView Venture Partners, Formative Ventures, .406 Ventures, and Cisco Systems invested in the firm, which boasts Netflix, the New York Times, Best Buy, and others among its customers.

Mashery has raised an additional $11 million to continue its expansion into the rapidly growing field of API management.

That brings the total in five rounds of fund raising to $24.8 million for the 50-employee, five-year-old, San Francisco company operating in a field that a few years ago didn't exist. Cisco Systems was one of the participating funders.

The growth in the use of application programming interfaces parallels the decline in the use of company websites as the main vehicle for reaching customers, said CEO Oren Michels in an interview. Today customers are more likely to be seeking what they want from a PC or smartphone app that goes straight to a service than from a browser window skipping from page to page. It's the "post-website era," he said.

Until recently, most companies with an online service maintained their own APIs as part of the way they did business. But the iPhone, iPad, Android, and game consoles have caused the number of platforms for which online apps may be written to explode. Companies with services for the platforms produce APIs to interface to those services, hoping to attract independent developers to use those services.

Mashery in San Francisco provides a place to maintain, safeguard, and make available all those APIs. The number of developers coming to its site and making use of APIs there has blossomed from 35,000 a year ago to 100,000 today. Developers have to register and are subject to the security controls governing access to each API.

Netflix, in its conversion from an analog film distributor through the U.S. Postal Service to a digital film downloader over the Internet, has had to produce many APIs that connect to its online services. They are available to developers at the Netflix Developer Network site, which is now run by Mashery.

"Netflix needs to be able to expose these application building blocks in a way that's managed and secure," noted Michels.

Mashery monitors traffic to each customer's APIs, enforces identification and security measures, and provides a version-control system through which API owners update their offerings. Specific rules can be put in place to govern who has access to certain APIs. In some cases, the API owner charges developers for their use; in many cases, they are freely available to registered developers.

"We have a ton of analytics to tell what is actually happening," Michels said. "You can spend a year or two yourself building this infrastructure, or you can rely on us to provide it for you."

In some cases, Mashery can convert older SOAP APIs into lighter weight REST or Java JSON APIs, but Michels emphasized that his staff "does not write code that affects the customer's back ends," the applications behind the APIs.

"If you do business on the Web, you're going to have an API within just a few years," he predicted. The firms currently supervises 25,000 APIs for applications running at the New York Times, Best Buy, Hoovers, Cnet, BillBoard, and 95 other companies, as well as Netflix.

The most recent round of funding was lead by OpenView Venture Partners, an independent venture capital firm. Also participating were previous investors Formative Ventures, .406 Ventures, and Cisco Systems.

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