Stytch has raised $30 million in its Series A round. Password management has become a major issue over the last few years. There are already several companies helping people with this task. There are many wishing to go beyond conventional applications while doing away with the password altogether. Stytch falls in the latter category. It got this funding round while launching its very-first API authentication platform (password-free). The round has set the cat amongst the pigeons for various reasons.
This startup had already raised a sum of $6.25 million in its seed round. This round was led by Benchmark and other participants like Index Ventures, and angels such as William Hockey, the co-founder at Plaid. That round was raised while the company was being established. However, the official announcement came after a long time. Other angels have also supported the company, including Dylan Field (Figma CEO & Co-Founder), Mahmoud Abdelkader (Very Good Security Co-Founder), Elad Gil (advisor to startups), and Amber Feng (Co-Founder at Cocoon and previous employee at Stripe).
The Series A round was led by Thrive Capital while other participants included Index and Benchmark, along with Coatue Management. The company has not revealed its latest valuation, although the figure could be upwards of $200 million as per estimates. Stytch was established by two ex-Plaid employees, namely the CTO Julianna Lamb, and CEO Reed McGinley. They created a feature for user authentication which is used by millions of people for linking their bank accounts to major apps such as Robinhood, Venmo, and Coinbase.
The company was founded with a vision that passwords do not have any security anymore and companies are easier to crack for hackers. Lamb has stated that while they worked at Plaid, they had tasks related to user authentication. They realized the sheer frustration of developing login and sign-up workflows. She also added that along with a complicated process, this also required more resources and was prone to errors as well. The other frustrating aspect was the aspects involved in authentication for companies. They felt that the web has already improved in multifarious ways although authentication still remained in a time warp. Stytch has simplified the authentication procedure, providing users and developers better infrastructure and tools for integrating password-free authentication mechanisms into contemporary applications. The team is building simpler SDKs or software development kits and APIs which will allow any organization to enhance user retention and onboarding through eliminating passwords from applications, while enhancing security and lowering engineering resources simultaneously.
Stytch has already released a beta product across 350+ developers who have also integrated password-free features including SMS-es, email-magic links, and WhatsApp pass codes, along with single-click invitations for users into their onboarding and authentication-based login workflows. Stytch is now making all these features available for its customers. Gaurav Ahuja from Thrive Capital will join the board of directors at Stytch.
