Tyk raises $35M for its open-source, open-ended approach to enterprise API management

APIs are the grease turning the gears and wheels for many organizations' IT systems today, but as APIs grow in number and use, tracking how they work (or don't work) together can become complex and potentially critical if something goes awry. Now, a startup that has built an innovative way to help with this is announcing some funding after getting traction with big enterprises adopting its approach.

Tyk, which has built a way for users to access and manage multiple internal enterprise APIs through a universal interface by way of GraphQL, has picked up $35 million, an investment that it will be using both for hiring and to continue enhancing and expanding the tools that it provides to users. Tyk has coined a term describing its approach to managing APIs and the data they produce - universal data graph" - and today its tools are being used to manage APIs by some 10,000 businesses, including large enterprises like Starbucks, Societe Generale, and Domino's.

Scottish Equity Partners led the round, with participation also from MMC Ventures - its sole previous investor from a round in 2019 after boostrapping for its first five years. The startup is based out of London but works in a very distributed way - one of the co-founders is living in New Zealand currently - and it will be hiring and growing based on that principle, too. It has raised just over $40 million to date.

Tyk (pronounced like tyke", meaning small/lively child) got its start as an open source side project first for co-founder Martin Buhr, who is now the company's CEO, while he was working elsewhere, as a load testing thing," in his words.

The shifts in IT towards service-oriented architectures, and building and using APIs to connect internal apps, led him to rethink the code and consider how it could be used to control APIs. Added to that was the fact that as far as Buhr could see, the API management platforms that were in the market at the time - some of the big names today include Kong, Apigee (now a part of Google), 3scale (now a part of RedHat and thus IBM), MuleSoft (now a part of Salesforce) - were not as flexible as his needs were. So I built my own," he said.

It was built as an open source tool, and some engineers at other companies started to use it. As it got more attention, some of the bigger companies interested in using it started to ask why he wasn't charging for anything - a sure sign as any that there was probably a business to be built here, and more credibility to come if he charged for the it.

So we made the gateway open source, and the management part went into a licensing model," he said. And Tyk was born as a startup co-founded with James Hirst, who is now the COO, who worked with Buhr at a digital agency some years before.

The key motivation behind building Tyk has stayed as its unique selling point for customers working in increasingly complex environments.

What sparked interest in Tyk was that companies were unhappy with API management as it exists today," Buhr noted, citing architectures using multiple clouds and multiple containers, creating more complexity that needed better management. It was just the right time when containerization, Kubernetes and microservices were on the rise... The way we approach the multi-data and multi-vendor cloud model is super flexible and resilient to partitions, in a way that others have not been able to do."

You engage developers and deliver real value and it's up to them to make the choice," added Hirst. We are responding to a clear shift in the market."

One of the next frontiers that Tyk will tackle will be what happens within the management layer, specifically when there are potential conflicts with APIs.

When a team using a microservice makes a breaking change, we want to bring that up and report that to the system," Buhr said. The plan is to flag the issue and test against it, and be able to say that a schema won't work, and to identify why."

Even before that is rolled out, though, Tyk's customer list and its grow speak to a business on the cusp of a lot more.

Martin and James have built a world-class team and the addition of this new capital will enable Tyk to accelerate the growth of its API management platform, particularly around the GraphQL focused Universal Data Graph product that launched earlier this year," said Martin Brennan, a director at SEP, in a statement. We are pleased to be supporting the team to achieve their global ambitions."

Keith Davidson, a partner at SEP, is joining the Tyk board as a non-executive director with this round.