The identity management platform Auth0 recently raised $120M in a Series F round led by Salesforce Ventures and backed by Deutsche Telekom Capital Partners (DTCP), Bessemer Venture Partners, Sapphire Ventures, Meritech Capital, Trinity Ventures, World Innovation Lab, Telstra Ventures and K9 Ventures. This latest round puts its valuation at around $1.92 billion and total raised funds at over $330 million, making it one of the leading identity-as-a-service providers on the market.
Auth0—pronounced “auth-zero”—is a cloud-based secure login system that authenticates user identity for enterprise customers. It provides single sign-on (SSO), universal login, multifactor authentication and password-free login capabilities for applications across many different platforms, devices and identity providers. Popular platforms and protocols that Auth0 integrates with include Microsoft’s Azure Active Director, G Suite, Facebook, Twitter, WordPress, GitHub and PayPal. As founder and CEO Eugenio Pace explains, whenever a user logs into an application with Facebook for example, Auth0 might be at work in the background.
The system’s multifaceted functionality translates into billions of logins per month to the Auth0 platform. The company’s services have proved valuable to a range of corporate clients looking to secure their networks from unauthorized access and data breaches. Customers include startups, medium-sized businesses and industry behemoths such as Siemens, LATAM Airlines, The Economist, News Corp, Harvard Medical School, Nvidia, Atlassian and many others. At present, Auth0 has around 10,000 enterprise customers spanning more than 70 countries.
Founded in 2013 by Eugenio Pace and Matias Woloski, Auth0 has rapidly grown since its inception. The company’s CEO Eugenio Pace started as an entrepreneur in his native Argentina before coming to the United States to work in a variety of roles at Microsoft. Observing how developments in identity solutions software were not keeping pace with the exponential rate of growth of the cloud computing industry, in 2013 Pace decided to jump in with his own startup to address the growing gap and launched the Auth0 platform alongside Woloski as co-founder and CTO.
The company’s growth story has been remarkable to say the least—just a couple years earlier in 2016 Auth0 was raising its $2.4M seed round. Auth0 attained unicorn status following its Series E round in May 2019, in which it raised $103M. Last year Auth0 saw 70% year-over-year growth and it is projected to expand over 50% this year. With about 700 employees worldwide, Auth0 is headquartered in Bellevue, Washington with five international offices in London, Sydney, Singapore, Buenos Aires and Tokyo. Auth0 plans to use some of its newly raised funds to further expand its global reach in areas such as central Europe, Scandinavia and Southeast Asia. Given the company’s growth trajectory, Auth0 anticipates it would be ready to IPO by early 2022.
With account fraud and security breach incidents increasingly common, it is no surprise that identity verification and authentication management is anticipated to be a $22.68 billion market by 2025. Nearly every online application depends on a seamless user experience built upon secure authentication. A number of companies in the space have also raised sizable amounts from investors in recent years. The most formidable player is San Francisco-based Okta, which IPOed in 2017 and now has a valuation exceeding $25 billion. Socure, a New York-based identity fraud detection service that integrates AI predictive analytics, raised $30M in February 2019. Another competitor, Onfido, raised $100M in an April 2020 round led by TPG Growth and grew its year-over-year sales by 264%.
Auth0 believes its scale, speed and developer-first focus give it a distinct advantage over other competitors. It also offers many customization options such as Lock, a customized embeddable login widget for web and mobile devices. The company’s acquisition in March of a provider of anti-abuse API called Apility.io that detects blacklisted IPs, domains and emails to filter out fraudulent sources, has further positioned it for future success.
The COVID-19 economic and health crisis has accelerated the digitization of business operations and with it the need for robust cybersecurity software. Whether its online schooling, virtual appointments, ordering groceries, or digitized experiences, coronavirus has necessitated dependence on effective online tools for many businesses that before employed such cloud-based tools merely as optional enhancements. For some companies, their ‘new normal’ may evolve into one completely devoid of a physical presence. Investments once made in tools for securing physical property such as security cameras and guards will need to be reallocated toward sophisticated cybersecurity solutions.
In the wake of pandemic-fueled demand for digital identification solutions, Auth0 beat its Q2 revenue projections. Despite the uncertain economic environment, venture capital dollars have continued pouring into top identity management players. The strength of identity-as-a-service companies amid the COVID-19 pandemic tracks with the tech industry at large, which has been buoyed by increased consumer reliance on cloud-based services. Shares of tech companies such as Amazon, Facebook, Apple and Microsoft have all seen their stock prices surge in value since the implementation of coronavirus shutdowns earlier in the year.