The business of building for and selling to developers is big. Startups around the world are busy creating new developer-focused — or at least developer-forward — solutions at a rapid clip.

The “developer tools” tag on TechCrunch has been busy this year. We’ve covered recent news in the space from Hardhat, CodeSee, Harness and Gadget, to share a few individual items.

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The concept of selling to developers is attractive. Many startups are building in an API-first way, creating tools and services that software engineers can hook into their existing products or workflows. This creates a dynamic where sales are often self-serve and pricing is based more on usage than the per-seat model that SaaS made ubiquitous.

Investors are also enthused by building stuff for developers and selling directly to their end-user. Data indicates that more than $37 billion went into developer tools startups last year, a huge sum for any category.

The space we’re describing is broad, including companies like Hashicorp, which went public last year and builds developer tools relating to infrastructure and security. GitLab also went public last year on the back of its git-style code repo service for devs. And Samsara went public as 2021 came to a close, selling IoT solutions to developers, including an API.

You might think that with venture capital piling into the technology business model category and a number of recent IPOs to point to, the market for such work would be hotter than ever. And yet.

Boldstart Ventures’ Ed Sim noted yesterday that public developer- and infrastructure-focused startups are seeing their valuations fall in recent quarters:

Naturally, this got us thinking, as the wave of 2021 venture capital that developer-first products raised was partially predicated on that year’s public market-signaled valuations. And those have come down dramatically. The trend is not precisely new, though recent data does make the point very clear.

It’s worth mentally circling back to the C3.ai IPO from late 2020. The company’s growth story was a little odd, and its pricing was seemingly a little rich. Then it shot out the public-market gate like a racehorse, pushing its valuation into the stratosphere. Since then, however, things have changed.