SAN FRANCISCO — Stytch, a company dedicated to improving security and user experience with passwordless authentication, says it has raised a $90 million Series B round of funding valuing the company at $1 billion. The round was led by Coatue Management LLC, with participation from existing investors Benchmark Capital, Thrive Capital, and Index Ventures.
Stytch plans to use the funding to continue to build tools and infrastructure that make it easier and faster to build authentication into apps and websites. As part of the funding, Stytch also announced its acquisition of Cotter, a no-code passwordless authentication platform backed by YC. The acquisition will combine the two companies’ technologies, bringing Stytch’s vision of a passwordless world to life faster by making it even easier for developers and companies to adopt passwordless technologies.
“Today, more than 3,500 developers are building on the Stytch platform adding email magic links, SMS and WhatsApp passcodes, OAuth connections, one-click user invitations, and embeddable magic links into user onboarding and login flows,” said Reed McGinley-Stempel, co-founder and CEO of Stytch. “With every new tool we add to our platform, we are continuing to improve the user onboarding experience, while enhancing security and saving significant engineering time in the process.”
When McGinley-Stempel and Co-Founder and CTO Julianna Lamb were both at Plaid, they witnessed the shortcomings of passwords first-hand, both from a security and usability perspective. They set out to make the authentication process easier, without leaving users vulnerable to account takeover attacks. They founded Stytch to solve the problem.
“As we know, passwords cause headaches for users and companies because people don’t like to spend the time to reset passwords. As a result, they can pose a security threat to users and deter conversions and customer retention,” said Lucas Swisher, a General Partner at Coatue Management. “We believe the world of online identity is undergoing a sea change and are impressed with Stytch’s API-driven approach to blending authentication into product experiences. We are excited to partner with Stytch as they pioneer us toward a passwordless future.”