1Password, the Toronto-headquartered password management app, says it has raised $620 million at a $6.8 billion valuation, making it one of Canada’s most valuable tech firms.
Remembering and protecting passwords has become increasingly important for individuals and the companies they work for in recent years, with the average person now having dozens of different passwords for various apps and accounts. Many of them are required to contain a combination of letters, numbers and symbols.
Jeff Shiner, CEO of 1Password, told CNBC that the company is trying to ease the tension between security and convenience. “Humans were not built for security,” he said. “We make it simple for people to stay safe online.”
1Password started out as a consumer password management app, but in 2015 it started to build a product for businesses that allows passwords to be securely shared and managed across teams.
The business version of 1Password, which integrates with several other work platforms, was launched in May 2016 and Shiner said it is now used by over 100,000 companies including the likes of Slack and IBM.
“We allow the people at the businesses to focus on their task at hand … make it easy for them to get in [and] just forget about the complexity of the security,” Siner said.
Growth story
At the end of 2019, 1Password raised a $200 million series A round led by Facebook and Spotify investor Accel Partners. It raised a $100 million series B round in July 2021 at a $2 billion valuation.
Revenues for 2021 are expected to come in at around $150 million, Shiner said, adding that businesses now account for about 60% of 1Password’s revenue.
Firms are charged from $7.99 per user per month, while 1Password’s consumer customers pay $2.99 a month for access to the product. The company said it has several million consumer customers but it declined to specify the exact number.
The series C funding round – one of the largest security funding rounds ever – was led by Iconiq Growth, while Lightspeed Ventures, Tiger Global and Accel also participated. Investors received around 9% of 1Password’s shares in exchange for the capital.
The 16-year-old company, which competes with the likes of LastPass and NordPass, said it plans to use the funding to improve its products and hire more staff.
Since 2020, 1Password has gone from having 177 employees to around 570 currently.
“We plan to double the size of our team again this year,” Shiner said, adding that the company is looking for potential acquisitions.
The hybrid workforce
John Curtius, a partner at Tiger Global, said that his firm likes 1Password as it is seizing a major market.
“Blurred lines between work and home, the explosion of cloud apps and surging threats have made protecting our digital lives more important than ever,” Curtius said in a statement.
He added: “1Password stands out with its track record of scaling world-class solutions built around the biggest risk and opportunity: humans.”
Advances in biometrics in recent years have allowed people to use their faces and finger prints instead of complex passwords to access apps and devices. But Shiner said our unique features aren’t necessarily as secure as encrypted passwords.
“If anybody ever got a copy of your fingerprint or your face, you can’t change that,” he said.