In the spotlight: Tyk
- Date Published
Digital transformation is fuelling a surge in demand for innovative software solutions across all parts of the economy. These are increasingly built using modern approaches to software development including microservices and APIs (Application Programming Interfaces). This has created a major global growth opportunity for Tyk, one of SEP’s newest investments.
Tyk, an emerging leader in the API management market, was founded in 2014 by CEO Martin Buhr, COO James Hirst and CCO Andrew Murray. Its 130 strong workforce is distributed across 26 countries, and they serve multinational clients in Europe, the US and Asia, including Starbucks, Societe Generale and Domino’s Pizza.
APIs form the invisible backbone of the digital economy and underpin modern software experiences, with API-powered services fulfilling a raft of tasks carried out online by consumers and businesses daily. Analysts at Gartner estimate the global API management market is worth $2 billion per annum and expanding by 25% a year, making it one of the fastest-growing technology markets covered by Gartner.
Managing large amounts of data and integrating applications has become increasingly critical. Online requests to book an appointment, check a bank balance or place an order, trigger a complex set of exchanges between multiple systems across diverse internal and external IT networks, many hosted in the cloud. For example, if someone orders a pizza via Deliveroo, data must flow seamlessly between applications connecting the customer, Deliveroo, pizza restaurants and payment providers – these exchanges are processed by APIs.
As APIs proliferate, organisations are struggling with ‘software spaghetti’, says Tyk CEO Martin Buhr. “API management is bringing order to that spaghetti – it converts what’s coming in and processes it in a way systems can handle.”
It requires sophisticated orchestration of interactions between millions of individual software micro components to keep enterprises running smoothly. APIs act as communication channels and Tyk’s API management platform co-ordinates this activity, enabling enterprises to collect, retrieve, analyse, process and store data efficiently. Buhr explains that using API management platforms to ‘orchestrate’ systems makes it easier for software developers to build and maintain applications, helping drive innovation and productivity.
Tyk began as an open source API gateway and this remains a core offering used by a community of tens of thousands of developers. In response to customer requests, Tyk expanded its products, launching its enterprise focused API management platform, followed by Universal Data Graph (UDG), which enables easy ‘plug and play’ integration with a query language called GraphQL.
Since joining the portfolio in September 2021 following a $35 million growth equity round led by SEP, Tyk has embarked on an expansion strategy which includes accelerating product development, doubling its workforce and growing its share of key global markets.
Historically the API management market has been dominated by global tech giants selling inflexible monolithic systems with multi-million dollar price tags. These systems can take several years to integrate, by which time they may be outmoded. A new generation of nimble innovative players has reshaped the API market and Tyk is in the vanguard of this movement, says SEP Director Martin Brennan.
“Tyk stands out for the depth and richness of its technology and its engineering-led culture. The team is commercially astute, having built the business in a capital efficient manner while delivering really strong revenue and customer growth.”
Tyk is a cloud native’ company and was first to market with an offering enabling clients to manage API ‘gateways’ either centrally or in multiple regions in multiple clouds. This is a major benefit for businesses operating mission critical systems 24/7 in global markets.
Being ahead of the pack to launch unique high performance solutions has been key to Tyk’s success. Also, unlike many businesses that had to adopt a remote working model when the pandemic struck, Tyk has been ‘remote-first’ from day one. In practice, that means that while it has a UK headquarters and regional hubs in London, Singapore and Atlanta, Georgia, employees can choose their location and working patterns. Its distinct culture helps it compete for talent. “We spend a lot of time thinking about our culture. The golden rule is – don’t let anyone down,” says Buhr.
After consistently growing the company with capital generated from revenue and funding from an early investor, Tyk’s founders decided that a growth equity partner would enable the business to scale faster and capitalise on opportunities. Tyk had approaches from numerous funders and Buhr says that they were attracted by SEP’s experience in working with SaaS businesses and track record for achieving strong exits, such as its $1.9 billion sale of travel search engine Skyscanner.
“We needed someone well-connected who could give us the right kind of insights. We also wanted a partner that actually cares about us a company not just about passing the bag to the next investor. SEP bring the right kind of seriousness and gravitas to the board to help map our growth path.”
“There were some great differentiators from the start. SEP did really detailed research before they came to us. They presented this to us in the first meeting and said ‘Here’s how we can help’. That was a huge eye-opener and we felt nobody else had really done that,” Buhr says.
SEP has helped Tyk further expand its networks and identify top engineering and commercial talent to join the company at board level and below, says Brennan. SEP is also helping put in place a strong framework for the next phase of expansion.
SEP’s Brennan says Tyk has a huge growth opportunity. “All the trends and dynamics point to increased spend going towards the modern cohort of API players. The tailwinds are good and the business has a scalable model in place to facilitate continued rapid growth. We are really excited to work with Martin, James and the team as they continue to scale the business and address the global market opportunity.”