This CEO was so broke he had to crash on Travis Kalanick's couch - now he's raised $18 million from Andreessen Horowitz
Andreessen Horowitz general partner Martin Casado, who cofounded networking startup Nicira before VMware gobbled it up in 2012 for $1.26 billion, will also join Mashape's board.
Today, Mashape is going strong, with 25 employees. And teams at companies like Amazon, Spotify, and Target are using Mashape's flagship Kong software to build their apps in more modern ways. Better yet, as of December 2016, Marietti says, Mashape is cash flow positive, after raising a relatively meager $8.1 million in venture funding over the years.
But before we go into what Mashape will do with this money, let's step back and look at how this company got here. It's a story of determination and dumb luck - even Casado says that one of the things he most admires about the Mashape founders is "the amount of sacrifice that they did" to get where they are today.
"You walk along a hard road as a company," says Mashape CEO Augusto Marietti.
Indeed, in a very real way, if it weren't for Uber CEO Travis Kalanick and Airbnb CEO Brian Chesky, the leaders of Silicon Valley's two most prominent startups, and a willingness to rough it out when they were broke, Mashape might not exist.
The Uber-Airbnb connection
It was 2009, and 18-year-olds Augusto Marietti and Marco Palladino had come from Milan to San Francisco's TechCrunch 50 conference with a demo of a website that could mash up data sources...and very little else.
An entrepreneur named Travis Kalanick (yes, the future Uber CEO) made the trip possible when he picked Marietti and Palladino from a crowd of 30 or so applicants to crash free of charge at his "Jampad" - his large San Francisco home, which doubled as a hangout and meeting spot for the local startup scene - for 10 days during the event.
"I don't know why he picked us, but he picked us," says Marietti.
The event didn't result in the funding they were looking for, but the Mashape team wasn't discouraged. Besides, they had made a powerful friend, which would come in handy later. They flew back and forth between Italy and San Francisco, hustling for funding.
At this point, they were teetering on broke. They ate rice and beans, took meetings at Starbucks, and shared the same bed in the cheap Airbnb rooms they found. Once, Marietti says, they ended up sleeping on benches in San Francisco's Dolores Park because they had nowhere else to stay.
Still, they had another fortuitous encounter when their Airbnb fandom resulted in them crashing at Airbnb's headquarters - which at the time was really just 8 guys sharing a house in San Francisco. There, Marietti got to watch Airbnb cofounders Brian Chesky and Joe Gebbia at work, internalizing their focus on building communities.
Chesky and Gebbia, too, acted as mentors for the young Mashape team. The biggest lesson Marietti learned from the Airbnb founders: A competitor can replicate your product's features. But if you have a dedicated community of users, well, that's "very, very hard to copy."
Turning point
The real turning point would come in April of 2010, when Mashape finally found a group of early YouTube employees who might be willing to make a small investment. Kalanick offered the Jampad's living room as a meeting spot, and even sat on Marietti's side of the table during negotiations.
When one group of investors said they might be interested, but they needed to sleep on a decision, Kalanick pushed Marietti into taking a more hard-line stance, telling Marietti that "if they leave, you're never going to see them again."
Kalanick instead told the investors that they had five minutes to talk privately and make a decision, or else Mashape would walk away. A handshake deal was struck for a little over $100,000, and the Mashape team, which only had $2,000 in the bank at this point between then, was saved.
"That saved us, literally," Marietti says. "We wouldn't be here without Travis."
It was hard enough in 2010, Marietti says. Nowadays, he says, there are more and more startups vying for attention, and he's not confident they could do it again. "I probably wouldn't survive if I had to do it now," Marietti says.
So what does Mashape do?
Mashape is riding the wave that programmers call "microservices," where you take one big, monolithic, complex piece of software and break it down into multiple simple little ones. Those little bits then talk to each other via a method called APIs, or application programming interfaces.
With microservices, if you're trying to build a new website, mobile app, Amazon Alexa skill, or smart refrigerator, programmers can just build the vast majority of the software from the figurative Lego bricks they already have, rather than start over from scratch. It's an approach pioneered at companies like Amazon and PayPal.
Marietti describes this as a "shapeless" approach to software development, where the same code can be reused across platforms old and new. And he says that, as "elephants" among the Fortune 500 and their ilk start to accelerate their software strategies, they're turning to Kong to help them manage and secure their microservices architectures.
"They're the elephants going through a transition," says Marietti. "They have a very complex need."
That's why Marietti is raising the funding now, despite Mashape's recent turn towards profitability. He sees a big chance to build out Mashape's profile among big companies, positioning Kong as a big way to help them move into the future.
Bits into atoms
From the perspective of Andreessen Horowitz's Martin Casado, Mashape is playing into a bigger trend entirely.
To go back to Travis Kalanick, much of Uber's strategy hinges on the usage of APIs: When you hail an Uber via Google Maps, that's Google's code "talking" to Uber via an API. Similarly, when you use an Amazon Echo to play a Spotify song, Alexa "asks" Spotify for the song via API.
Now, Casado says, there are APIs that let you do everything from send text messages, to reserving warehouse space, to sending snail mail via USPS. It's not just apps and services that are being affected; it's the physical world.
"Any service that exists, there's a way to programmatically control it," Casado says.
So as software just keeps on eating the world, Casado says, there's going to be even more demand for software like Mashape's Kong, which can help company manage this exploding world of APIs. And as it is, he says, Kong is already the most popular software of its type out there. And, true to the lessons, that Marietti learned from Airbnb's founders, Kong has a thriving community of thousands of open source developers using it in their own projects
"I think now is the time to be bold because now is the time to disrupt the infrastructure," says Casado.