Stytch, an API-first passwordless authentication startup, has secured $90 million in Series B funding, pushing the company over the $1 billion valuation line.
The investment, led by Coatue Management LLC with participation from existing investors Benchmark Capital, Thrive Capital and Index Ventures, comes just four months after Stytch raised a $30 million Series A at a valuation somewhere around $200 million. Since then, the startup has seen an almost 1,000% increase in developers using its passwordless authentication platform, rising from 350 developers in July to about 4,000 in November.
This, the company's CEO tells us, is because of its API-first approach. “If you think about other passwordless startups, they're very widget focused,” Reed McGinley-Stempel, CEO of Stytch and former Plaid employee tells TechCrunch. “We’ve had enough experience with non-API-first products that we knew there were a lot of limitations to what you can do."
"For example, one of the common use cases we’ve seen that we would never have anticipated is checkout flows -- adding the ability to create a new account at checkout with an SMS password or email verification, rather than guest checkout," said McGinley-Stempel.
The company has also launched a number of new products since its Series A raise in July, including support for Sign In with Apple, Google and Microsoft, embeddable magic links and one-time passcodes by email. This week it’s also adding support for WebAuthn, allowing Stytch to support hardware-based authentication keys like Yubico, as well as biometric-based Face ID and fingerprint logins.
Stytch said it plans to further expand its platform over the coming months, too. As part of its Series B raise, it acquired Cotter, a no-code passwordless authentication platform backed by Y Combinator that allows users to add one-tap login to websites and apps. Stytch said it will make it easier for developers to adopt passwordless technologies.
The company will also use the funding to expand its 30-person team and to build out its infrastructure.
Stytch isn’t the only startup that’s on a mission to kill off the password. In June, Transmit Security raised $543 million, in what was believed to be the largest Series A investment in cybersecurity history, for its natively passwordless identity and risk management solution. The following month Magic, a San Francisco-based startup that builds “plug and play” passwordless authentication technology, announced it had raised $27 million in Series A funding.