This week, San Francisco-based startup Merge announced its $4.5 million seed fundraising round. This round was led by NEA, joined by angel investors including former MuleSoft CEO Greg Schott, Cloudflare CEO Matthew Prince, Expanse co-founders Tim Junio and Matt Kraning, and Jumpstart CEO Ben Herman.
Using a unified API, Merge provides B2B companies the ability to access and integrate data from all human resources, payroll, recruiting, and accounting platforms. Along with these integrations, the company also offers an application management tool that automatically detects issues where an IT team would have to get involved and eliminates the engineering burden on the customer. With this new capital, Merge is looking to expand its platform to different areas, likely starting with customer relationship management systems.
Why This Transaction?
York IE chose this as our transaction of the week to highlight how COVID-19 changed the landscape of the digital transformation of businesses, and how companies are either ramping up efforts or completely evolving their strategies to become digital-first companies. Businesses are now forced to focus on how they can still perform at a high level by becoming more digitally dependent. In fact, in a survey done by Google Cloud, out of 700 IT-decision makers, 65% concluded that they were accelerating investment in their digital transformation journey, while 75% of them stated that they have not slowed down their progress even with the pandemic.
The use of APIs is a key component to a successful digital transformation. Being able to use data that exists within a company and making it reusable and valuable whether it’s through an external source or an internal platform is something that can set a business apart from another. For example, restaurants want to be able to use payment systems, delivery systems, etc, all on one application or platform. Companies like Merge are doing this using a unified API platform to connect multiple applications including tools like HR, payroll, and accounting platforms so that businesses are able to leverage their data across their entire digital environment.
Google Cloud’s State of the API Economy 2021 report said, “APIs enable these synergies by letting developers easily access and combine digital assets in different systems, even if those systems were never intended to interoperate.” Another benefit of using APIs is the little to no cost when adding an additional API, as Google Cloud stated, “The more interactions there are around a given API, the more value it tends to create for all participants.” And while it may be expensive and timely to maintain and control these APIs, companies like Merge have an internal suite of tools that detect issues before they become a serious problem.