Funding for cybersecurity startups remains murky. According to According to a recent Crunchbase survey, companies in the digital security industry raised 30% less funds – $1.9 billion – in the third quarter of 2023 compared to the third quarter of 2022.
But some startups are bucking the trend.
Concrete example, FusionAuth, a company that provides authentication and user management tools to developers, today announced that it has raised $65 million in a funding round led by Updata Partners. This is FusionAuth’s first tranche of outside capital in its five-year history; before that, the business – which is profitable – had been fully bootstrapped.
“It was the right time to partner with Updata because it allows us to hire and scale faster to meet the growing demand from millions of developers and companies like Stihl, Oppenheimer, Clover and Zenni Optical,” CEO Brian Pontarelli told TechCrunch in an email interview. . “We will use this investment to expand our marketing and product development efforts, tap into our partner networks and develop a more formal distribution program.”
As for Updata, she felt that FusionAuth’s client list and track record made investing in the company an « easy decision. »
“FusionAuth solves an obvious problem with its simple approach to customer identity management,” said Dan Moss, principal at Updata Partners. “Its feature-rich platform simplifies the complexities of authentication and removes friction during development. An impressive customer list and 13 million downloads prove how much developers already love FusionAuth and its track record of profitable growth made our investment an easy decision. With our support, FusionAuth will have the resources it needs to scale to meet rapidly growing demand while continuing to innovate and bring meaningful new features to developers.
Pontarelli founded FusionAuth in 2018 after launching his first company, CleanSpeak, an online content moderation platform, in 2007. He says he saw a gap in the login and authentication market and launched FusionAuth to to fill in.
FusionAuth builds customer identity tools, enabling engineering and product teams to add user registration, login, and management capabilities to applications. The tools can be deployed on most computers, according to Pontarelli, allowing developers to run them locally, on virtual and cloud servers or on dedicated hardware, even without an Internet connection.
FusionAuth offers APIs and SDKs for multi-factor authentication, passwordless login, password machine-to-machine support and authentication.
“Development teams do not have the time or expertise to create and evolve their own authentication solutions,” Pontarelli said. “FusionAuth solves this problem with a solution that is accessible to everyone while being robust enough for the most demanding organizations. »
Pontarelli sees FusionAuth as competing with some of the customer identity and access management industry’s native identity tools, such as Amazon Cognito, Microsoft Entra ID and Google Firebase, as well as existing vendors like Okta. But he argues that FusionAuth offers more sophisticated features than many of its competitors, including passwordless authentication via access keys, single-tenant infrastructure, and configurable password encryption.
It’s a sales pitch that obviously resonates. FusionAuth now has over 450 paying customers while its free community edition has over 13 million downloads. Revenue has doubled every year since FusionAuth was founded, Pontarelli says.