Software startup Postman is the latest to join India’s unicorn club after it raised $150 million in a Series C round led by US-based Insight Partners at a $2 billion valuation.
Postman took six years to get to the prized billion-dollar billing, the fastest for an Indian software-as-a-service company, eclipsing Freshworks that took eight years and is now valued at $3.5 billion. Icertis and Druva, also valued at more than a billion dollars, took 10 and 11 years, respectively.
Started in Bengaluru by Abhinav Asthana, Ankit Sobti and Abhijit Kane, Postman is headquartered in San Francisco, as is the case with the SaaS firms that serve global customers.
However, not much else is known about Postman. Moneycontrol tried to unravel the mystery and here is what we found:
What does Postman do?
Postman is targeted at coders, who create, test, and modify application programme interface (APIs). It has an understandable and intuitive user interface and helps test APIs without creating code for testing, which was the norm earlier.
Postman is even more relevant for present times as software systems are interacting with each other. Postman’s API collaboration is also helpful in a cloud-driven era, where more and more companies are saving and accessing data on the cloud than through servers and hardware.
Today, payments, communication and collaborations are all API-centric. For example, when you check the weather on your phone, via a search engine or a weather app, APIs bring that information to you.
Google or the app does not own the weather data, so they use APIs to source it. Other uses include retailers communicating with courier companies or even streaming services like Netflix or Amazon distributing content.
What’s an API?
An API, put simply, is a piece of software that helps two apps to talk to each other. It is like a messenger that takes your message, delivers it to the app you want to interact with and gets back a response. Almost what a postman would do but for bringing back the response.
So if you are booking a flight through a portal, you will want to know the timings, prices, seats, etc. APIs take this command, ask the airlines for the data and gives it back to you.
Why is Postman or APIs such a big deal?
In a digital world where we interact through apps constantly, even more so in the times of coronavirus, the simplification of app writing, or simplifying testing and helping millions of apps to talk to each other, even if they are written in different languages, is a huge business.
Earlier coders used to use APIs as a last resort. But, as Postman’s CEO Abhinav Asthana says, they promoted an “API- first approach”, which helps build far more effective and powerful APIs.
Isn’t $2-billion valuation a bit steep?
In startup valuations, investors often price in the future value of a product. Postman’s valuation also needs to be seen in the context of a post-coronavirus world, where there is a big shift to all things digital.
With social distancing the norm and people preferring the safety of their homes, digital services are the way forward. Companies like Postman, the backend of these digital services, become all the more important.
It is also helped by some of the benefits that most global SaaS firms have-- being able to expand to multiple countries very early, having recurring revenue and not burning too much cash for growth.
These are some possible reasons behind the valuation, which tend to be investor-specific and subject to change, especially among privately-held internet startups.
Who are the investors?India and US-based Nexus Venture Partners, one of India’s first homegrown VC funds, was the first investor in Postman in 2014. The company raised a $50 million Series B last year, led by Silicon Valley-based Charles River Ventures, with Nexus participating as well. Nexus has a unique strategy among Indian VCs-- to invest in US software and Indian startups from common funds. It is also an investor in Druva, another SaaS unicorn.