#25 The Case for a Vertical API Layer in Your B2B Marketplace
B2B marketplaces have evolved far beyond simple matching platforms. As they mature, many find that the next leap in value creation comes not from more buyers or sellers, but from becoming indispensable infrastructure. One way startups accomplish this is by building vertical API layers. An API is a set of functions and procedures that allows other software applications to access the features or data of your startup. As an example, the weather bureau's software system contains daily weather data. The weather app on your phone “talks” to this system via APIs and shows you daily weather updates.
In this post, we explore how leading B2B marketplaces across industries are using APIs to embed themselves in customer workflows, unlock new revenue streams, and build long-term defensibility.
Why APIs?
For marketplaces, APIs can:
Reduce churn by making the marketplace part of users' daily operations
Increase GMV through automation and scale
Enable new monetization models like usage-based pricing or embedded services
Create moats by integrating deeply with user infrastructure (e.g., ERPs, TMSs, CRMs)
Common API Patterns
Workflow Integration – APIs that allow users to sync critical data (inventory, jobs, orders) with their core systems
Transaction Automation – APIs that let users programmatically complete core marketplace actions (booking, dispatch, fulfillment)
Embedded Financial Services – APIs for lending, payments, insurance, and working capital
Examples Across Industries
Construction / Field Services
Kojo: Offers APIs for material procurement workflows, letting contractors sync purchasing data directly into ERPs like Procore or Sage.
ServiceTitan: Has partner APIs for things like dispatch, payments, inventory, and financing tools integrated into trades businesses.
Logistics / Freight
Flexport: Built APIs for customers to programmatically manage freight bookings, track shipments, and pull customs documents.
Wholesale / Retail
Faire: Has APIs for brands to sync inventory, product data, and order fulfillment between Faire and their Shopify backend. Retailers can also pull catalog data via API.
Handshake (owned by Shopify): Wholesale ordering platform with APIs that allow ERP, inventory, and CRM integration for suppliers.
Services Marketplaces
Housecall Pro: Though not a classic two-sided marketplace, it operates as a vertical SaaS with marketplace and offers APIs that sync job scheduling, invoicing, and reviews.
Thumbtack: Offers limited APIs to certain partners to enable lead flow or review sync across platforms (typically via Zapier or partner programs).
Financial Services / Lending
Bluevine & Fundbox: Embedded lending marketplaces that offer APIs to platforms serving SMBs, like QuickBooks, to offer credit at point of need.
Pipe: Offers APIs for SaaS platforms to let their customers “trade” revenue streams programmatically.
What This Means for Marketplace Founders
If you’re building a B2B marketplace, start by asking:
What workflows do your users repeat daily?
What tools do they already live in (e.g. QuickBooks, Salesforce, Procore)?
What’s the smallest API surface you can expose that unlocks value?
Once your API is in place, you’ve created more than a feature, you’ve become part of your customer’s critical workflows.
Conclusion
Vertical APIs are not just technical artifacts—they are distribution, retention, and growth engines. As B2B marketplaces evolve, those who win will be the ones who embed, not just enable.
Weekly Deals
What We’re Reading
The Rise of Vertical Marketplaces: Why the Future of B2B E‑commerce Is Niche - Chronicles B2B marketplace sales growth — from $24B in 2020 to $224B in 2023 — showcasing the rising dominance of vertical marketplaces - Forbes
Prior Perspectives (our most read posts)
#21 5 Principles for Building Data Moats in Marketplaces - link
#10 5 Dimensions for Evaluating Marketplace Supply - link
#19 Marketplace Moats in the Age of AI - link
#23 Re-Marketing: The Most Overlooked Growth Lever in Marketplaces - link
Meet with us
We’re on the move, and love to meet with founders and investors in person. Reach out to contact@snak.vc:
July 21 - 25 | Chicago TechWeek
Aug 20 - 21 | M25 Summit
Sep 17 - 18 | Milwaukee