API Testing Market Analysis & Overview:

The API Testing Market size was valued at USD 2.32 billion in 2024 and is expected to reach USD 10.59 billion by 2032, expanding at a CAGR of 20.9% over the forecast period of 2025-2032.

Wider acceptance of API across various industry segments, such as BFSI, healthcare retail, as well as IT & telecom, is supporting the rapid growth of the API testing market. With companies gradually moving their applications to the cloud and into microservices architecture, the need for API testing tools that can check for functionality, performance, and security also rises. Top players like Postman, Tricentis qTest, and SmartBear ReadyAPI continue to provide automation and CI/CD-ready support features in their respective solutions. North America is the market's leading region, and Asia Pacific displays a high growth potential. Growing adoption of DevOps and agile-based deployment models and acceleration in cyber-attacks on enterprises continue to propel the demand for advanced API testing solutions across the globe.

According to Postman's State of the API, 91% of developers use APIs regularly in their development cycles, but only 63% actively test APIs before deployment.

The U.S API Testing Market size reached USD 0.65 billion in 2024 and is expected to reach USD 2.71 billion in 2032 at a CAGR of 22.58% from 2025 to 2032.

With an established IT infrastructure, a large number of technology companies operating in the country,  and early adoption of cloud computing and microservices architecture, the U.S. maintains a significant share of the global API testing market. The increasing popularity of DevOps and Agile methodologies throughout enterprises is another factor powering the need for automated and continuous API testing tools. In the United States, significant investment in digital transformation, increasing security concerns related to API vulnerabilities, and rapid adoption of AI and ML in testing solutions are significantly contributing to the continuous growth of the market.

API Testing Market Dynamics

Drivers:

• Growing Adoption of Agile and DevOps Practices Accelerates Demand for Advanced API Testing Solutions

The high adoption of Agile and DevOps-based methodologies for software development, been a great booster for sophisticated API testing solutions. With these practices, more frequent CI/CD (continuous integration and continuous deployment) requires extensive and automated API testing to validate smooth functioning and integration at all stages of the software development lifecycle. API testing tools have become an important part of the puzzle, allowing teams to meet the demands of rapid development and be sure that bugs are caught earlier rather than later, all while delivering quality software. One such new trend is the use of artificial intelligence (AI) and machine learning (ML) in automated API testing tools to provide predictive insights about potential failures and improve test coverage.

Restraints:

• High Implementation Costs and Integration Challenges Impede Widespread Adoption of API Testing Tools

The large-scale uptake of such API testing tools is highly limited due to exorbitant implementation costs and integration issues. The cost associated with the end-to-end API Testing solutions can be out of reach of Small and medium-sized enterprises (SMEs) due to the expenses related to the licensing, infrastructure, and resources. All these tools might be difficult to integrate into existing legacy systems, not to mention breaking the already established workflows. These challenges get bigger due to the lack of standardization among APIs, which makes coming up with universal testing methodologies difficult. All such factors restrict the smooth implementation of the API testing tool in various organizational landscapes.

Opportunities:

• Expansion of E-commerce and Mobile Applications Presents Lucrative Opportunities for API Testing Solutions.

The explosive growth of e-commerce platforms and mobile apps has significant market potential for the API testing solutions market. With the growing dependence on APIs to perform transactions, store customer data, and orchestrate third-party services, the need to test the functionality and security of these APIs becomes critical. These interfaces are essential to good user experience and user trust, and API testing tools are critical in assuring the performance and safety of these interfaces. Low-code and no-code API testing platforms have now evolved for testing APIs with more rapid deployment and wider reach.

Challenges:

• Shortage of Skilled Professionals and Lack of Awareness Hinder Effective Implementation of API Testing Practices.

The most frightening challenge in implementing effective API testing practices is the scarcity of talented manpower and awareness of the need for API testing. The inability to hire skilled resources with knowledge of API testing techniques and tools is a significant challenge for many organizations, resulting in ineffective testing processes. This skills gap is especially in SMEs and developing areas where development and training facilities are scarce. Tackling this issue will require a concerted approach with education, training, and promotion of good practices to help create a skilled workforce capable of implementing an effective API testing strategy.

API Testing Market Segmentation Analysis

By Application

The Web API Testing Encryption segment accounted for 43.42% of the revenue share in 2024. One of the main reasons for this prominence is the increase in demand for secure data transfer between web services, most specifically in the financial and healthcare sectors. Organizations like SmartBear and Postman have streamlined platforms to add sophisticated encryption tests and validate API compatibility in case of encrypted data. Rise in digital transactions and regulatory compliance requirements regarding data privacy further drives the growth of this segment, which showcases the importance of encryption in API testing.

The mobile API Testing segment is estimated to grow at the fastest CAGR of 25.24% over the forecast period, owing to the increasing number of mobile applications and the need for a smooth user experience. As mobile apps become the new normal for a range of services, their APIs need to work perfectly. Katalon Studio has extended its feature set to not only cover mobile UI testing with generic mobile API testing functions that can tackle the challenges mobile environments present. Improved performance standards are to be expected due to the advent of 5G technology and increased use of mobile internet, which means more stringent testing will have to be undertaken.

By Deployment

The On-Premises deployment segment holds the largest revenue share of 35.52% in 2024, owing to the propensity of organizations demanding more control over their testing environments and data security. For example, the banking and healthcare industry must comply with rigorous standards, and they usually select on-premises solutions. Robust on-premises API testing tools, provided by API testing market companies like Micro Focus and IBM, help address this need. There is a clear shift to cloud solutions, but demand for on-prem deployments is still high in the areas where data sovereignty and security are crucial.

The average enterprise manages 15,000+ APIs, yet only 45% of them are fully tested, creating a massive opportunity for expanded test automation.

The cloud-based deployment segment is projected to drive the fastest API testing market growth rate of 24.69% from 2019 to 2024. Cloud-based testing tools are flexible, accessible with ease, and provide easier integration with CI/CD pipelines, making them best-suited for agile development environments. Cloud-native testing platforms that enable collaborative testing across distributed teams, such as Postman and SmartBear etc, have also been introduced by the vendors. The migration to working from home, along with an increasing need for continuous testing, only speeds up the transition to cloud solutions.

By Industry Vertical

The IT and Telecom sector dominates the API testing market share of 52.09% in 2024. The sector is quickly transforming to digital and requires quality API testing for smooth delivery of services, hence this leadership. We are already witnessing several large telecom operators coming together in Ericsson's joint venture to enhance Network APIs, which shows the focus on API capabilities within the industry. The increasing requirement for end-to-end API testing solutions as telecom companies keep widening their bouquet of services is augmenting the command of the sector.

The Healthcare segment is expected to register the fastest CAGR of 38.32%, as the services become more digitized and APIs are being integrated with electronic health records and telemedicine platforms. It is essential to properly lock and secure these APIs so they are stable, and this is leading to the use of dedicated testing solutions. Parasoft and Tricentis provide solutions specifically designed for the healthcare sector. In this segment, API testing is driven by the high requirements on patient data privacy and regulatory compliance.

By Test Category

Functional Testing accounted for the largest revenue share of 65.32% in 2024. Functional testing is an important part of API testing that checks whether an API is working properly and whether it is integrated and working easily. Software like SoapUI and Postman has been very helpful in giving complete functional testing. The segment remains at the top of the chart, for this need for functional testing, which is a rigorous testing to check the behaviour of each of the micro services, becomes increasingly critical as organizations adopt micro services architectures over traditional monolithic applications.

The security testing is expected to be highest, at a CAGR of 27.25%, during the forecast period due to increasing concern over API vulnerabilities and data breaches. As API ecosystems grow in complexity, security testing becomes even more crucial to help discover and deter any potential attacks. There are a few vendors, like SmartBear, that have addressed this by introducing powerful security testing tools that fit directly into existing development workflows. The focus on data protection regulations and increased variation in high-profile cybersecurity attacks indicates that security testing has become a necessity in the API realm.

By Tool

Commercial API testing tools dominate the market, holding a 46.40% revenue share in 2024. They provide a full set of enterprise-grade features, support, and integration. Tricentis and Micro Focus are examples of more comprehensive commercial solutions designed to handle large testing needs across the enterprise. The readiness of organizations to pay for trusted and scalable testing tools that ensure software quality and compliance leads to the continued growth in demand for commercially available products.

The SaaS-based API testing tools segment is estimated to grow at the fastest CAGR of 25.40% owing to the need for flexible, scalable, and cost-effective testing solutions. With SaaS tools, teams can access testing environments without the need for a large investment in infrastructure, they help teams accelerate agile and DevOps practices. Postman and Katalon are SaaS-based testing solutions that make it easier to test continuously and collaborate. The growing trend for cloud-native applications and the demand for faster roll-out cycles provide an additional driver for SaaS testing tools.

API Testing Market Regional Outlook

North America leads the market with a revenue share of 35.63% due to the wide acceptance of advanced technologies, strong presence of market-leading tech firms, and a well-established technology infrastructure enabling digital transformation. It has early experiences with DevOps, agile, which require continuous API testing of seamless integration.

The U.S. is the dominating country, owing to its large-scale digital ecosystem, investments in software development, and the presence of key market players like SmartBear and Postman.

Europe is growing at a steady rate owing to the growing number of digitalization processes across industries and the increasing need to comply with data privacy regulations such as GDPR, along with the increasing need for a swift and seamless software system integration. Local enterprises are focusing on automated testing tools as a part of the software development process and compliance.

Germany is the largest IT market in Europe, with an office-heavy economy resulting in an installation of industrial automation and IT infrastructures, coupled with high standards of high-quality software in many sectors.

Asia-Pacific is expected to be the fastest-growing region in the API testing market, driven by rapid digital transformation, the surge in mobile application development, and an increase in the number of e-commerce and fintech domains. High capital expenditure on IT modernization in emerging economies boosts the demand for affordable and scalable testing automation tools, especially cloud-based testing tools.

India tops the region due to developer community size, growing software industry, and the strong push for agile and DevOps, especially by startups and the enterprise sector.

The Middle East & Africa and Latin America is also estimated to grow steadily in the future due to cloud adoption, digital transformation, and smart city initiatives in the UAE and Brazil supported by strong infrastructure and technology-driven investments.

Key Players

The major key players of the API Testing Market are Micro Focus Silk Test, Celigo, RapidAPI, Tricentis qTest, Postman, API Fortress, BlazeMeter, Parasoft SOAtest, SmartBear ReadyAPI, Sauce Labs, and others.

Key Developments

• In November 2024, Tricentis rolled out qTest Copilot, a generative AI assistant, and introduced ShiftSync, augmenting test management, analytics, and collaboration to enable QA teams to speed up software delivery.

• In January 2024, RapidAPI unveiled Search Term Insights, a new feature providing insight into consumer API searches, allowing users to improve API Hub quality and inform data-driven decisions.