How Postman became a unicorn in just 6 years

"10 million developers on the Postman platform now,” Abhinav Asthana tweeted on February 7. The company’s 32-year-old CEO was retweeted by Postman’s official handle. Both have modest followings on Twitter and, therefore, the milestone didn’t make much of a splash. That changed on June 11. That’s when Postman announced it had raised $150 million in venture capital at an enterprise valuation of $2 billion. The wider world sat up and took note. As in the world outside of the community of some 25 million-odd software programmers — the folks for whom “hello world” is not just a randomly cheerful phrase (it is a simple program that coders first learn). In that universe, Postman is something of a standard. It makes a specific task in software engineering — talking to other applications — very easy. And fortunately for Postman, the web evolved in the last few years in a direction that moved such connections from the fringes of software architecture towards the centre.But for everyone else, it was an eye-popping moment. How did a company that’s virtually unheard of, which is not a copy of an established business model and doesn’t lose money proportionate to its user base, become a sizeable unicorn (startup-land term for a company valued at more than a $1 billion) in just about six years with a headcount of 250 staff?It is an improbable tale that started in Lakhimpur Kheri — a remote district in UP near the India-Nepal border — and features an adorable dog. 76489473The latest funding round has doubtless made Asthana a notional multimillionaire but you couldn’t tell that by the sparsely furnished room (with a mattress on the floor) in the unpretentious backdrop of the Zoom call on which he opened up about his journey and how he ended up creating a tool that’s used and loved by millions of software developers — as difficult-to-please a group of customers as one can fathom.Postman is a tool for the creation of APIs — short for application programming interface — that facilitate interactions between apps as well as functionalities within apps. APIs are in play when you are using your Facebook credentials to log into another app or try to book a flight ticket or check the weather. Postman helps developers deal with all aspects of creating an API — testing, debugging, documenting, publishing and so on. The company says one in every three developers in the world uses the platform. Elite developers from every tech major in the world — Twitter, Microsoft, Google... you name it — use Postman. Speaking from his San Francisco apartment, exclaiming “Bay Area rents!” jokingly as the reason for his spartan surroundings, Asthana, who has a calm, professorial delivery belying his relative youth, said that the financial milestones are a validation of what the company had done in the past, and not a goal in itself. “Our goal was to build a super-strong product company that was solving a very hard problem.”Asthana and his team have been hyper-successful at that.76489284The startup’s collaborative platform for software developers is currently used by 11 million software developers across 500,000 companies. Ensuring all this hums along smoothly is a slim team of 250 employees, of which about 150 are in Bengaluru and 50 in San Francisco. Postman is incorporated in the US. For a company that took birth as one of the many “side projects” Asthana was juggling in his mid-20s alongside other jobs, that’s a remarkable ride.Asthana first started dabbling in code when he was in fifth grade and his civil engineer father brought home a computer. The family at the time lived in Lakhimpur in eastern Uttar Pradesh, some 150 km from Lucknow, the state capital. Battling erratic power supply and dial-up internet, he started learning Visual Basic, PHP and C, from books like the popular Let Us C. His father, these books and the internet opened the world of coding for him and by the time he was in high school, he was designing websites and making pocket money, through a company called A2 Interactive that he started with an American kid he met online. That took a backseat with higher studies, but he returned to web design during his days in BITS Goa, where he launched Grayscale Design, which, after college morphed into a startup called TeliportMe.Asthana encountered the hard problem he mentions when working at Yahoo’s Bengaluru offices in 2010, alongside Postman’s co-founder Ankit Sobti. Both were working on APIs when they ran into hurdles during development. There are various stages to building an API and back in 2010, various irritants as well. “Testing was a pain, documentation was a pain,” says Asthana. When he realised there were no existing tools to solve this, Asthana decided to roll up his sleeves and get down to it himself. “So I built this app and put it on the Chrome webstore.”764896437648964976489654Almost immediately, the product began gaining traction among the developer community, and users began adopting it, commenting on it and requesting Asthana for other features. In the interim, Asthana quit TeliportMe, where he was CTO, and reconnected with Sobti, then in Mumbai, to figure out what to do with Postman. He took a bus from Bengaluru to Mumbai as he couldn’t afford a flight. As luck would have it, Google’s team in California reached out and told Asthana they wanted to feature Postman as a top app in the Chrome webstore, just then. That was just the validation they needed. Combined with the encouraging feedback from developers, it convinced Asthana to plunge full-time into Postman, along with Sobti and a junior from BITS, Abhijit Kane, who had interned at Asthana’s previous startup. Working out of a two-bedroom apartment in Indira Nagar, the three co-founders bootstrapped in the initial year with their savings, donations from users (there was a “donate” button on the app) and money earned from a paid in-app feature to automate testing, called Jetpacks for Postman.In its current version, Postman’s platform helps developers with the entire process of building an API. In recent years, APIs have come to be seen as important cogs in the global economic engine, as collaboration, integrations and real time transactions — all of which rely on APIs — have surged. Companies that have moved aggressively to embrace APIs have profited handsomely,” McKinsey said in a 2014 report. That trend has only accelerated since then and the centrality of APIs in software design will likely take deeper roots. All of this makes Postman and the market it addresses a compelling proposition for investors. Postman has never really had to work on customer acquisition because the users who love and evangelise the service do that job for them. It was one such loyal user who introduced the company to its first investor, Nexus Venture Partners, who participated in its three subsequent fundraising rounds as well. “One of our portfolio companies, Indix, told my colleague Sameer (Brij Verma) that Postman was a life-changer for them and that we needed to figure out who the founders are and meet them,” says Jishnu Bhattacharjee, managing director at Nexus.Verma and, later, Bhattacharjee, met the three cofounders and their dog, Cooper (since elevated to “chief happiness officer”). “In addition to being a product developer and engineer, Abhinav could also articulate his vision of a world where software development is API-driven. It was no longer about writing code from scratch but about leveraging what has already been done. It was a vision that resonated with us,” says Bhattacharjee.This is the API-first approach that Postman champions, where developers think of that pipe connecting the disparate systems right at the beginning of the software development cycle.Asthana recalls that when he and Sobti went to the Nexus office in 2014 and shared Postman’s metrics at the time — 500,000 users in every country and hundreds of feature requests on Github — the venture capitalists were piqued and asked what their team looked like it. Er, they were looking at the team, the duo said. 76489296Nexus invested $1 million as seed money in 2014, the year Postman was officially incorporated. Other rounds followed in 2016 and 2019. Cumulatively, the company has raised $200 million so far from Nexus, Charles River Ventures and Insight Partners. But Bhattacharjee says much of that is still in the bank. Profitable growth, he adds, has been 3x.The $2 billion valuation for Postman seems outsize — the company declined to reveal revenue or margins, but media reports peg revenues in the $40 million ballpark. But Bhattacharjee says investors are looking not just at the “beautiful product” or the fact that it does not have much competition, but the “stickiness” it offers. “If I am using Postman, and I am progressively getting more value from it, it becomes a very difficult decision to move out of the platform.” The network effect, where value increases as more users get added, is what was driving up the valuation, he says. It’s also a moat against competition.Historically, for investors in this space, a company that has been able to get the mindshare of the developer community is attractive because wherever developers are creating the next set of large companies, they will be using that firm’s tools, says Prayank Swaroop, partner at Accel, who keenly tracks the software-as-a-service (SaaS) space that Postman is part of. Accel is an investor in Freshworks, the first SaaS unicorn from India. “As companies like Google become bigger, they will need more developers to use their products and companies like Postman will become more important. If they use Postman, they will get access to millions of developers in one shot — it is like a distribution channel, which tends to be valued higher,” Swaroop says. Postman’s success, he says, also portends a shift in India’s SaaS success story, much of which was earlier pegged on companies offering variations ofproducts that already existed, at cheaper prices. “Postman and a bunch of others are trying to do it on an equal footing with the global guys.”Asthana is similarly optimistic about the Indian SaaS market, and its potential to come up with top-notch products. “It’s like athletes breaking records — once it’s done, you know it’s possible. I think we’ll see many more such companies come out of India. The finesse of products is improving — the minimum viable products I see, or the first version which determines how quickly you can iterate, is better than what we originally had,” he says.Because the co-founders are all developers, placing the needs of people like them front and centre becomes easy. “All three of us (co-founders) are developers and it’s baked into our DNA to build the absolute best experience for the people we serve. That’s our only focus,” says Asthana.

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