The Role of API Marketplaces Across 5 Sectors

Most API developers are familiar with the concept of an API marketplace to some degree or another. The best known of these is (arguably) Rapid, a public API marketplace that purportedly contains over 40,000 APIs. But, in addition to generic API directories like Rapid, many other API marketplaces have emerged in specific industries.

From public API hubs to branded catalogs, the attitudes around API marketplaces continue to shift. In this piece, we’ll look at how API marketplaces are evolving, how they’re used and regarded (including in recent research by Gartner) in a few different industries, and what the future of API marketplaces might look like.

Why Do We Need API Marketplaces?

Back in 2021, our own Bill Doerrfeld wrote about the dangers of API sprawl. He cited an estimate that there may be as many as 200 million public and private APIs in use worldwide, which has almost certainly increased significantly since then.

Elsewhere, APIMetrics’ David O’Neill and Contxt’s Mayur Upadhyaya declared that , with 83% of internet traffic comprised of API calls, “APIs are eating the world (wide web).” It’s very clear that, in 2024, the creation and adoption of APIs shows no signs of slowing down.

API marketplaces offer a valuable opportunity for companies to showcase their APIs or third-party services in a way that captures developers’ attention. Although no marketplace will contain every suitable API, they’re a good starting point in the information-gathering stage.

But, as we’ll see below, the lines between API aggregators, marketplaces, and portals are looking increasingly blurry. In fact, the terms are sometimes used interchangeably. Could that become a problem for folks trying to narrow down suitable APIs for their next project?

The State of API Marketplaces

Source: https://www.lunar.dev/post/gartner-hype-cycle

In Lunar’s great post on AI gateways and API consumption, we can see that API Marketplaces feature in Gartner’s 2024 API Hype Cycle in three different spots. While API Marketplaces and Portals in SCP is positioned as an Innovation Trigger, API Marketplaces in Banking sit close to the bottom of the Trough of Disillusionment.

Despite all that, API Marketplaces as a whole, however, are breaking into what Gartner calls the Plateau of Productivity. They define this section of the Hype Cycle as follows:

“Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off.”

What can we take from this? Well, it appears that not all API marketplaces are created equal. Although the overarching opinion is that marketplaces offer a mature, viable approach to API adoption, attitudes toward them vary considerably in different market vectors.

API Marketplaces in 5 Different Sectors

Many API consumers are already familiar with platforms like APILayer and Rapid. So, let’s zero in on the experience of using API marketplaces in a few different industries.

1. Proptech

Earlier this year, we wrote about the role of APIs in proptech​​. In that article, which draws heavily on a talk by BuiltAPI’s Ivan Nokhrin, we mentioned the BuiltAPI marketplace.

BuiltAPI continues to be an impressive offering, with the company’s own app-like integrations sitting alongside APIs from third-party providers. The marketplace features specifications, breaks down parameters, and provides request and response samples. Propexo offers a unified API that integrates with multiple pieces of property management software.

Elsewhere, PropTech companies like HappyCo (headquartered in the US) and Alto Software (UK-based) feature API marketplaces that package featured integrations and plugins. It’s clear that, in PropTech, the emphasis is very much on reducing the number of different systems users need to deal with.

2. Open Banking and FinTech

Unsurprisingly, given the recent fintech boom, there are lots of related marketplaces out there. Companies like NXTsoft, NayaOne, APIX, and Signzy feature slick marketing pages promoting marketplaces that feature hundreds, sometimes thousands, of banking and finance APIs.

For the most part, however, these marketplaces are kept under lock and key behind ‘Request Demo’ and ‘Let’s Connect’ buttons. Some companies, like Finvolv, are a little more forthcoming when it comes to their integrations but stop short of a full breakdown of APIs and integrations — less a marketplace than a snapshot of the 250+ connectors they claim to offer.

The adoption of APIs within this space may rely more on word of mouth or sitting through a few sales pitches before you can comfortably dig into what providers actually offer.

3. Consumer

Although platforms like Zapier and IFTTT probably wouldn’t call themselves API marketplaces — they call themselves an automation platform and a no-code platform, respectively — that’s effectively the service they’re providing. So, how do they stack up to more technical options?

Zapier provides information about all 7500+ apps they integrate with, providing templates and suggestions about other apps to pair them with. No code samples, but you do get a breakdown of every step in the automation. IFTTT features categorized examples of top automations, although they don’t offer detailed information for all 900+ apps they work with.

When it comes to consumer API marketplaces, the name of the game seems to be covering as many bases as possible. Between the sheer volume of apps they support and the provision of free plans — 2 applets for IFTTT and 100 tasks per month for Zapier — it’s not surprising that these two major players continue to dominate.

4. Healthcare

Many healthcare API marketplace providers are out there, including some official government sources. Take, for example, the healthcare section of the UK Government’s Digital Marketplace. This thoroughly covers things like the features, service scope, and endpoints of products within it.

In the US, API marketplaces are offered by everyone from healthcare insurance companies (like United Health) to service providers like Optum (a self-declared health services innovation company) alike. The latter breaks down use cases, authentication, parameters, responses, and pricing.

It might feel a bit like every healthcare software provider has an API marketplace, but that shouldn’t be surprising. Healthcare tech is a very specific niche, and like proptech and fintech, requirements and regulations vary hugely based on the jurisdiction in which you operate.

5. Branded

Like Zapier and IFTTT, brands like Shopify and MailChimp probably wouldn’t claim to offer an API marketplace. However, in addition to Shopify’s own suite of APIs, the brand also features an app store. Likewise, MailChimp offers 300+ integrations in addition to their own APIs.

If these offerings — integration marketplaces? App aggregators? — aren’t exactly API marketplaces, but they’re certainly adjacent. And, interestingly enough, both brands do a good job with their marketplaces. Shopify provides user reviews, pricing, demo stores, and highlights, while MailChimp lists requirements, installation guides, and sample graphics.

Once again, volume is important here. In addition to opportunities for revenue sharing with marketplace providers, brands like these want to offer as many integrations as possible because it gives them an edge over competing services.

What the Future of API Marketplaces Looks Like

As demand for them has grown, we’ve seen lots of companies rush to add API marketplaces in a way that addresses their specific market sector. What those marketplaces actually look like can vary. Consider NextGen Healthcare, for example, which uses the marketplace format to advertise third-party vendor applications already using their suite of APIs.

Parsing through all these use cases, we’re seeing a few different types of API marketplace emerge, including:

• Paid API marketplaces: Often operating in the finance space, these are cagey about sharing information about their contents because they don’t want to give away too much of their secret sauce to competitors.
• Commercial API marketplaces: Well-established brands appear comfortable sharing in-depth information about the (usually large numbers of) companies and APIs they work with. (Revenue sharing and demonstrating highly competitive levels of integration are both factors here).
• Niche API marketplaces: What we’re often really looking at here are aggregators and integration-heavy products seeking to capitalize on related search terms by showcasing their and/or third-party APIs.

As for what’s next, there are a few possible outcomes. One is that market leaders like APILayer, Rapid, and Zapier will subsume smaller marketplaces either via acquisition or through the addition of categories/platforms that limit the relevance of other marketplaces in the API space.

Another, if AI becomes as instrumental in the finding and deployment of APIs as analysts like Paul Dumas imagine, is that API marketplaces could even become entirely redundant. AI could filter through and locate suitable APIs in a process entirely invisible to us.

Final Thoughts on API Marketplaces

In practice, 100% AI-driven integration is probably not something likely to happen in the near future… although you never know when it comes to AI. There will likely always be space for specialized API marketplaces within different industries and niches, but the quality and transparency of these offerings currently vary significantly.

Although those looking to showcase APIs within a slimmer niche probably won’t be able to match the output of established players, providing a comparable level of depth, including code snippets, uptime, and pricing, should be the aim. As for API consumers, looking for that level of detail within any marketplace you’re exploring is usually an indicator of high quality.