Developer tooling startup Postman Inc. today said that it has closed a $225 million funding round led by Insight Partners at a $5.6 billion valuation.

That’s up from a $2 billion valuation last June. The jump is a reflection of Postman’s rapid market expansion: The startup’s installed base has grown from 11 million users to 17 million over the past year. Those 17 million users include developers at 490 of the companies on the Fortune 500 list, Postman says, along with employees from about a half-million other organizations.

Postman provides tools that help companies build application programming interfaces. APIs are the channel through which applications interact with one another. They’re used to transfer information, for example when an analytics tool needs to access records from a database, to provision cloud infrastructure and automate business tasks. 

The reason Postman’s tools are used by so many organizations is that virtually every software project in the enterprise involves working with APIs. As a result, there’s a broad market for solutions that can make the work more efficient and less prone to errors.

Postman’s flagship offering is a tool for performing API testing. Companies have to equip practically every new application they build with an API so that the application may request the information it needs to process from other systems and perform related tasks. Moreover, because APIs play such an important role, companies must extensively test them for issues to avoid downtime.

Postman’s namesake tool makes it possible to write scripts that automatically carry out tests to free up time for developers. Over the years, in parallel with the steady growth of its user base, the startup has developed an array of additional products to simplify related API development tasks.

Postman provides a cloud-based platform called Workspaces that enables software teams to store code and other assets related to their API in a centralized repository. Keeping everything in one place, Postman argues, increases teams’ productivity. It can potentially also help reduce the risk of data breaches: Workspaces provides cybersecurity features that allow companies to control access to their API code in a fine-grained way.

For detecting API errors, Postman provides an analytics product that can collect data on how an API is used and flag potential malfunctions. Another product offered by the startup makes it easier for software teams to maintain the documentation associated with their API. Documentation is the umbrella term for the technical guides that developers write to help colleagues and customers understand their software.

“APIs have quickly become the fundamental building blocks of software used by developers in every industry, in every country across the globe — and Postman has firmly established itself as the preferred platform for developers,” said Insight Partners Managing Director Jeff Horing. “Postman has the opportunity to become a key pillar of how enterprises build, deliver products and seamlessly enable partnerships across the ecosystem.”

Postman has used the capital from its previous funding rounds to more than double its headcount since the start of 2020. The startup will continue hiring efforts following the $225 million investment announced today to grow its sales, marketing, product and engineering teams. In parallel, Postman will allocate resources to providing API-related education programs and supporting open-source projects.

Insight Partners was joined by a number of other institutional investors in the round. They included Coatue, Battery Ventures and BOND, as well as returning Postman backers CRV and Nexus Venture Partners. The startup has raised $430 million in total to date.

That Postman’s investors have more than doubled its valuation in about a year shows they believe the startup has significant room for growth. The startup’s installed base represents a massive market that may hold significant upselling opportunities. In particular, Postman could create new revenue streams by launching additional development tools and offering them to companies already using its existing solutions.

That’s the growth strategy Microsoft Corp.’s GitHub unit has taken. GitHub, like Postman, has a solution that is used by a significant percentage of the world’s developers and many large enterprises: its namesake code hosting platform. The Microsoft unit over time has built on the code hosting platform’s success by launching additional, paid products such as its cloud-based Codespaces code editor.

The additional $225 million now on Postman’s balance sheet gives it the option to accelerate its revenue growth strategy by acquiring startups with complementary development tools. 

Image: Postman