Popular password-management company 1Password has raised $200 million in a series A round of funding led by Accel, with participation from Slack Fund, Atlassian founders Scott Farquhar and Mike Cannon-Brookes, among other angel investors.
This is the first time 1Password has raised any outside investment, while it also represents one of the biggest series A rounds of funding ever.
Founded out of Toronto, Canada, in 2005, 1Password is one of a number of companies dedicated to storing passwords securely, allowing users to log-in to myriad online services with a single click. The platform can also be used to store other private documents, such as software licenses, credit cards, and driver licenses.
Barely a day goes by without some form of data breach hitting the headlines, and poor password management is a contributing factor to that. In the consumer realm, individuals are prone to reusing the same passwords across multiple services, and if one of those services is hacked it means that the perpetrator can reuse the same credentials to access other accounts belonging to the victims. To help counter this, a number of online tools existing to warn you if your login credentials have been leaked, such as Have I Been Pwned? (HIBP), while Google recently launched the Password Checkup Chrome extension.
For businesses, poor password hygiene is a major driving force behind security breaches, with 81% of these said to be due to stolen or weak passwords. And this is where 1Password is building much of its business, as it encourages strong and unique “unguessable” passwords that the users themselves don’t have to memorize or write down. Indeed, although consumers represent a big part of its scope, 1Password claims thousands of business customers who use the enterprise incarnation of the service, including Dropbox, IBM, and one of its new investors — Slack.
“We started 1Password to solve a problem we all feel every day: the hassle of creating and remembering complicated passwords to access the apps we need,” noted 1Password CEO Jeff Shiner. “Companies try to enforce strong password policies with unreasonably complex requirements that people can’t follow or remember. As a result, most of them create schemes to get around these rules by reusing the same password everywhere or adding subtle variations. This puts your employees and businesses at risk.”
After 14 years in business, it’s clear that 1Password simply hasn’t required external funding — it has been profitable for years based entirely on organic growth. But with an extra $200 million in the bank, this puts it in an even better position to specifically scale its enterprise-focused business around the world. For extra context, rival Dashlane raised $110 million earlier this year, and part of its focus is also on the business sphere — so 1Password is clearly looking to bolster its coffers in the chase for more corporate dollars.
“We don’t come across companies like 1Password very often, especially in an era of growth at all costs,” Accel partner Arun Mathew added. “Like Atlassian and Qualtrics, the 1Password team impressed us by building a business that’s not only scaling extremely quickly but also has been profitable since day one — and that’s why today we’re making the biggest single investment in Accel’s more than 35-year history.”