Upstart tech companies delivering their product or service via an API raised mammoth amounts of capital during the final year of the 2021-era startup boom. Things have slowed in the intervening quarters.

New data indicates that while the group of companies raised more capital in 2022 than in 2020, a downward trend in fundraising activity throughout the last calendar year shows that no startup cohort is immune from the venture capital slowdown. That applies to the groupings of new tech companies that were among the hottest before the recent downturn, too.

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GGV, a venture capital firm that invests across sectors, stages and geographies, compiled an index of what it considers API-first companies that it launched last year. TechCrunch covered its launch, as we have a soft spot for trackable baskets of startups that we can observe across time; similar collections from firms like Bessemer provide useful measuring sticks for the startup market, especially in a rapidly evolving venture capital and exit climate.

The venture group recently compiled the last of its 2022 information, sharing the data with TechCrunch+ ahead of its publication. Tiffany Luck and Chelcie Taylor, investors at GGV, sat with us to chat about the data. They also provided a slightly expanded dataset encompassing an even larger group of API-first startups at our request.

How are API-first startups faring in the face of private-market headwinds and some market pessimism about the health of many startups far from their exit point? The answer is mixed. On one hand, venture capital investment in the startup business model is slowing, but there is good news to be found as well. The tech talent market is slowly unlocking as tech titans release waves of experienced personnel, meaning that well-capitalized startups — and API-first startups did raise a lot of money during 2021 — may be able to pick up new staff that were previously out of reach.


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