Passwordless authentication platform Stytch on Thursday (Nov. 18) announced that it has raised $90 million in a Series B fundraising round that values the fledgling firm at $1 billion.
Coatue led the funding effort, while Benchmark, Thrive and Index also participated. Stytch will use the money to grow its suite of authentication products, including Embeddable Magic Links.
Stytch also announced its acquisition of no-code passwordless authentication platform Cotter.
“User experience and security have both evolved over the past few decades, but authentication is stuck in the 1990s despite underpinning all of our online interactions,” wrote Co-founder/CEO Reed McGinley-Stempel and Co-founder/CTO Julianna Lamb in a blog post announcing the injection of fresh capital. “That’s why Stytch was born: to make the next generation of authentication passwordless.”
“We believe in building tools and infrastructure that make it easier, faster and safer to embed authentication into apps and websites,” the blog post continued. “We’re making it easy to modernize your authentication flows and build great user experiences by adopting passwordless technologies.”
About two-thirds of users reuse their passwords across different accounts, and more than four out of five internet breaches are caused by weak or stolen passwords. About 75% of users who forget their passwords give up before completing the reset process, and 46% of users say that being asked to authenticate passwords “frequently” or “very frequently” prevents them from finishing an online transaction.
Related news: It’s Time to Shore up User Authentication as Digital Identities, Payments Converge
In the October edition of PYMNTS’ Authenticated Payments Report®, PYMNTS says the relationship between service providers and their customers needs healing, and the shortcomings of password-based online identity and lack of consumer trust are the crux of the issue.
Almost half (44%) of consumers rely on two to five passwords for all accounts, while 16% use the same password for all of their accounts. Microsoft recently announced that users can now remove their account passwords for a more secure authentication method.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More