Based in Toronto 1 password It is one of those few companies that is a) profitable and b) transparent enough to share finances.
And today, the company announced that it raised $ 100 million in a Series B funding round that doubles the company’s valuation to $ 2 billion.
You may recall that the previously started 1Password only raised its first round of external capital in 2019: a $ 200 million Series A led by Accel, which represented the largest individual investment by the venture company in its 35-year history. At the time, 1Password was hardly a startup, having been founded in 2005.
Accel also led its latest round, which featured Ashton Kutcher’s Sound Ventures, Kim Jackson’s Skip Capital and a host of tech executives, including Tobias Lütke, CEO of Shopify; Harley Finkelstein, President of Shopify; Stewart Butterfield, co-founder and CEO of Slack; Anthony Caselena, founder and CEO of Squarespace; Mike Cannon-Brookes and Scott Farquhar, Atlassian Co-CEOs; and Kevin Hartz, co-founder and president of Eventbrite, among others.
Profitable from day one, 1Password recently crossed the $ 120 million mark in ARR (Annual Recurring Revenue), according to CEO Jeff Shiner. More than 90,000 companies use its SaaS platform, including several big names like Under Armor, Shopify, PGA, IBM, GitLab, Slack, and PagerDuty. That’s more than 50,000 customers at the time of its November 2019 increase.
Founding couples Dave and Sara Teare and Roustem and Natalia Karimov came up with the idea for 1Password while growing another website-building company and realizing the struggle of keeping up with passwords.
It started out focused only on consumers. Over time, it evolved and began offering its password management services to businesses. This move took an already successful company to another level.
It also caught the attention of Accel, which has a history of investing in startup and profitable businesses. In its Series A and B rounds, the venture firm approached the company for investment.
Accel partner Arun Mathew, who drove his company’s investment in 1Password in both rounds, noted that “1Password has a very unique company profile. Seeing a company handling all these market tailwinds with fundamentals and metrics like this is truly unusual. Our hope is this [latest round] it allows the entire company to be even more aggressive in winning this market. “
Since its last increase, 1Password has continued to evolve, a testament to its self-proclaimed intention to never sit on its laurels, Shiner said. On the one hand, it has increased its workforce from 174 employees to about 475 today, including the formation of a go-to-market team, which the company has never had before.
And in the last few months, 1Password has expanded its commercial offering, launching Secrets automation in April and more recently, 1Password events, a business offering designed to protect “critical” business information. It has also launched a Linux desktop application and integrations with Slack and Rippling.
Automation of secrets, Shiner said, allows 1Password to protect the secrets of a company’s infrastructure “machine to machine.”
“Password management is often human-to-machine, so this is a huge advantage for us and expands what we do to a broader infrastructure,” he added. It was able to launch Secrets Automation with the help of the acquisition of a Dutch company, SecretHub.
The company plans to use some of its new capital for new acquisitions as the number of startups in the cybersecurity space continues to grow.
“Have a more solid balance it just helps the company take calculated risks and be opportunistic about potential mergers and acquisitions or invest even more aggressively where we see opportunities, ”said Accel’s Mathew. “For nearly 16 years, this company has been one of the best-kept secrets, no pun intended, for businesses and consumers alike.”
The COVID-19 pandemic and the resulting work-from-home shift only led to increased demand for the 1Password supply. In fact, with every business account, 1Password gives every employee a free family account to use at home.
“Since work and home have been mixed together, it has been a huge benefit to users,” Shiner said.
That blurry line is one reason Accel sees even more potential in 1Password. The firm has 24 active security investments across its portfolio, according to Ethan Choi, partner at Accel.
“This duplication [on 1Password] It signifies our belief that this is one of the most important areas of security today, ”said Choi. “CIOs and CISOs want their employees to be productive and access the applications they need, but they also need them to be secure.”
For its part, 1Password believes that, despite having been around for 16 years, it is only “scratching the surface,” according to Shiner.
“I think that’s what excites us, it’s just this incredible opportunity that we see in front of us,” he said. “We need to keep moving, urgently.”
Gaining the knowledge of so many seasoned tech executives was also a factor in raising more capital, Shiner said.
“We already had a great relationship with Accel, but being able to bring in those additional people and the experience they bring with them is tremendously valuable,” he added.