APIs define how software systems communicate. In M&A, API quality determines integration feasibility, partner ecosystem value, and platform extensibility.
Why APIs Matter in M&A
Modern businesses are API-first. The quality of APIs determines:
- Integration complexity and timeline
- Partner and developer ecosystem health
- Platform value and extensibility
- Customer stickiness through integrations
Key API Assessment Areas
1. API Design Quality
- RESTful principles adherence
- Consistent naming conventions
- Versioning strategy
- Error handling patterns
2. Documentation
- Completeness and accuracy
- Interactive documentation (Swagger/OpenAPI)
- Code examples and SDKs
- Change logs and migration guides
3. Security
- Authentication mechanisms (OAuth, API keys)
- Rate limiting and throttling
- Input validation
- Data encryption in transit
4. Performance & Scalability
- Response time benchmarks
- Throughput capacity
- Caching strategies
- Load balancing approach
Key Takeaway: API quality is a leading indicator of engineering maturity. Well-designed APIs suggest disciplined development practices throughout the organization.