IFTTT gets $7M from Andreessen Horowitz, NEA and Lerer to connect all of our Internet silos
Today, IFTTT is announcing a Series A round of $7M that is led by Andreessen Horowitz, with NEA and Lerer Ventures participating. The round will help IFTTT to expand its staff, and work towards building out its service into a platform.
Context & Ripple Effects
IFTTT enters this round with a mixed year behind it: in June it refreshed its brand and added Belkin WeMo compatibility, extending its recipe-based automation beyond the roughly 46 consumer services like Dropbox, Instagram and Instapaper into physical devices — but in September it was forced to strip out its Twitter triggers entirely under Twitter's new API terms, a reminder that every channel it connects depends on someone else's goodwill.
The $7M Series A, led by Andreessen Horowitz with NEA and Lerer Ventures participating, is being read by the company as fuel for hiring and for turning the service into a platform rather than a utility. The pickup was unusually broad for a round this size — TechCrunch, VentureBeat, PandoDaily, GigaOM, AllThingsD and NYT Bits all carried it — and it lands at a firm that, as of August 2012, had already been counted alongside Accel, Benchmark, Greylock, Kleiner and Sequoia in Silicon Valley's top tier.
First-order effects
- IFTTT gets the headcount to move from a single-purpose automation tool toward a platform, with Andreessen Horowitz, NEA and Lerer Ventures now holding stakes in that transition.
- Every service IFTTT connects — Dropbox, Instagram, Instapaper and the rest — gains a better-resourced intermediary, while Twitter's September API clampdown stands as the standing risk each of those partners can replicate.
Second-order effects
- Hardware makers like Belkin, whose WeMo line IFTTT began supporting in June, get a consumer-facing automation channel that software-only rivals lack — pushing other connected-device vendors toward similar integrations.
- Platform owners face a choice the Twitter episode crystallized: keep IFTTT-style connectors inside their terms of service and capture the ecosystem goodwill, or wall off APIs and push aggregators toward open alternatives.
Third-order effects
- If the platform buildout holds, the durable position is the orchestration layer between consumer apps and internet-connected hardware — a layer whose economics are set less by IFTTT than by the API policies of the services it stitches together.
- Consumer-web funding of this shape — a small Series A against broad press pickup and a top-tier lead — points toward automation middleware becoming a recognized category rather than a hobbyist tool.
The trend: Web services are consolidating around cross-service automation layers that bridge consumer apps and connected hardware, with their viability hostage to the API terms of the platforms they connect.