Authentication startup FusionAuth raises $65 million, its first outside round. Startups in cybersecurity are still having trouble finding funding. In Q3 2023, startups in the digital security field raised $1.9 billion, or 30% less than in Q3 2022, according to a recent Crunchbase study.
However, a few firms are defying the norm. As an illustration, consider FusionAuth, a business that offers user management and authentication solutions to developers. The firm recently revealed that Updata Partners led a $65 million investment round in which it secured capital. FusionAuth has been operating for five years with only internal funding; this is the first round of outside investment.
CEO Brian Pontarelli said in an email interview with TechCrunch, “This was the right time to partner with Updata because it allows us to hire and scale more quickly to address increasing demand from millions of developers and businesses like Stihl, Oppenheimer, Clover, and Zenni Optical.” “We plan to utilize this investment to enhance our product development and go-to-market strategies, as well as to establish a more structured channel program and connect with our partner networks.”
Regarding Updata, it is believed that FusionAuth’s clientele and performance history made investing in the business a “simple choice.”
Updata Partners partner Dan Moss stated, “FusionAuth is solving a clear pain point with its straightforward approach to customer identity management.” Its feature-rich platform reduces development friction and streamlines authentication processes. 13 million downloads and a stellar clientele list show how well-liked FusionAuth is already among developers. Its lucrative growth history also made our investment choice simple. FusionAuth will have the resources it needs to expand to meet the quickly increasing demand while continuing to innovate and provide developers with useful new features with our backing.
After establishing his first business, an online content moderation tool called CleanSpeak, in 2007, Pontarelli established FusionAuth in 2018. According to him, he noticed a vacuum in the login and authentication space and created FusionAuth to close it.
Engineering and product teams may add registration, login, and user management functionality to apps with FusionAuth’s customer identification tools. According to Pontarelli, developers may execute the tools locally, on virtual and cloud servers, or dedicated hardware—even without an internet connection—because they can be installed on most PCs.
For multi-factor authentication, passwordless login, passkey support, and machine-to-machine authentication, FusionAuth provides software development kits and APIs.
According to Pontarelli, “development teams don’t have the time or the expertise to build and scale their autonomous solutions.” “FusionAuth provides a solution to this issue that is user-friendly and capable of meeting the needs of even the most demanding organizations.”
According to Pontarelli, Okta and other legacy suppliers compete with FusionAuth’s native identity technologies in the customer identification and access management space, which include Amazon Cognito, Microsoft Entra ID, and Google Firebase. However, he argues that compared to many of its competitors, FusionAuth provides more advanced features, such as single-tenant architecture, customizable password encryption, and passwordless authentication using passkeys.
The sales pitch is hitting home. Currently, FusionAuth has over 450 paying clients and over 13 million downloads for its community version, which is available for free. Since FusionAuth’s creation, revenue has doubled annually, according to Pontarelli.