August 5, 2015
LTP: There is a lot of interest in APIs but how exactly do APIs help a startup do things differently?
An API done well could be a huge advantage for a startup and can help a startup speed up the process of bringing a new product to the market. Earlier, startups use to build everything in-house and for on-premise. All FinTech companies now float their products on cloud services, so they should be able to access API data like an on-premise database. If it’s on the cloud, it’s on their fingertips. So in the case of using APIs, a startup does not need to build everything from scratch and they can use already existing APIs to build the product.
LTP: There used to be APIs in the yester years as well. What has changed and what are the new APIs all about?
Earlier, the APIs were usually build for slower networks. Now, the APIs are called over and over again, so they need to be very real-time accessible, robust and they need to be very scalable.
The APIs that we build now are for the on-demand world. You can use as much as you wish. They are so scalable, very cheap and fast. They require very less on-premise storage once you start using them effectively, and the cloud based products should be like that. So we have built APIs for the modern world.
We serve 1 Billion calls per day. It means we can scale according to the requirements.
LTP: I hear a lot that somebody used an API and the problem was that it was not really built for their kind of use case. We also found out from somebody else that they were facing the same problems. Since APIs will be used by different types of clients, how do you make an API which could be used by all of them? If you customize it too much, it does not remain usable by everybody. So what do you do?
It requires deep domain knowledge to built a good API. And a good API should be usable across various use cases. So you don’t design it for only one specific use case but you design it in such a way that it is easy to understand, intuitive and can work across many use cases. Earlier, we had tools to customize the APIs and we use to provide them to the clients so that the client could customize them at their end. Now, with more experience and having our APIs used by various types of clients over and over again, we don’t need to really do that. We have built standardized APIs that are work across the board. So now we have more than 1,000 clients and they are doing 1 billion APIs calls per day. Our client includes wealthfront, Betterment, Motif Investing, Personal Capital, Robinhood, StockTwits,Yodlee, BlackRock, Charles Schwab & Co., Inc., BNY Mellon, Natixis, TD Ameritrade, Envestnet, Oppenheimer & Co. Inc. Of course, there are good and bad APIs. It all depends on how much effort you have put in, how good the API you have built is, how usable and scalable it is.
LTP: You have mentioned that GE and Starbucks use your APIs. Can you elaborate on that a bit more?
Starbucks has a big employee base. They also have an employee portal. So they display stock quotes using our API to their employee portal. GE has a big financial services division and they disburse corporate loans. In fact, they are the biggest in the country. So they use our API for the interest rates and other things. A lot of our clients use it for various reasons—price of commodities, interest rates, FX rates, financial data and so on and so forth.
LTP: What is your business model?
We usually charge for an unlimited use. There are 45 different services. So for each of the service, say, Equity, FX, real time, etc., you can pick and choose. For example, you can have FX in real time or you can have FX for historical and so on and so forth. So there are various combination of services available for which you can get unlimited use and pay for the subscription. You can also pay per API call in some cases.
LTP: I see that you have also integrated with FactSet, and I have used FactSet in the past. So if we use FactSet directly versus if we use through you, is it cheaper or is there any other advantage?
It is not cheaper but it is easier to use. Instead of going for a large contract with FactSet, you can save money by just using what you want within FactSet and using it as much as you as want. Instead of taking the whole big contract, which is usually per year, you save by using our system on pay-as-you-go.
LTP: Tell me little bit about your company in terms of funding and how big it is.
We are about 40 employees right now. 1 Billion calls per day are made to our systems and we are providing information of (covering) about 55 countries. We have raised about $16.4M so far.
LTP: Tell me about your background.
Prior to founding Xignite, I was Vice President of Product Management at Advent Software, the leading provider of software solutions for the investment management industry. Prior to Advent, I held senior product and marketing management positions at Walker Interactive Systems and Oracle Corporation.
LTP: How do you differentiate from the competition? Who is your competition?
Our competition is really Bloomberg Terminals, Thomson Reuters and any other source which provides financial data in the some format. If you look at anybody else, they are old school APIs. We have built a modern set of APIs. There is nobody else across such a broad spectrum of APIs globally and, therefore, we are moving ahead at a very fast pace. We are being used by a lot of wealth management clients and non-fintech companies as well. Even other API companies like Yodlee are our partners. We want to focus on the data space and not branch out too much. We want to focus on data APIs which are around price of commodities, FX rates and similar other financial data points. That is our focus.
LTP: What are the drivers for the use of APIs?
First of all, you don’t require any data centers and infrastructure. You don’t need to invest in building up everything. You can pretty much use something which is pre-built and scales with you. If it is a good, scalable API, then you should be able to call it again and again, in a reliable fashion. These are the drivers because of which entrepreneurs/developers are increasingly depending on APIs to help them build products. They can focus on their core strength and build that part of the product, while for other things (such as financial data) they can just use the API.