Twilio Acquires Two-Factor Authentication Service Authy

Twilio today announced that it has acquired Authy, a Y Combinator-backed startup that offers two-factor authentication services to end users, developers and enterprises. The two companies declined to disclose the financial details of the transaction.

Authy says that about 6,000 sites currently use its service to protect their users. These include Coinbase, MercadoLibre and CloudFlare. The service only recently raised a major funding round and brought on Marc Boroditsky, an experienced entrepreneur and the former vice president of Identity and Access at Oracle, as the company’s president and COO.

As Authy founder Daniel Palacio told me at the time, the company was going to use some of that funding to make a push into the enterprise. That’s clearly something Twilio is also interested in, so the matchup between the two companies makes sense (besides the fact that communication services and strong authentication should always go together).

screen568x568Twilio CEO Jeff Lawson tells me that the entire Authy team will join his company effective immediately. Palacio will lead Twilio’s product and engineering team for authentication solutions and Boroditsky will become Twilio’s general manager for authentication solutions.

As Lawson also tells me, Authy was a natural fit for his company. “Over the past few years, Twilio has powered components of the authentication and verification experience for brands like Intuit, Box and GitHub. In doing so, we saw several common heavy-lifting processes that each customer had to build independently,” he told me in an email this week. “Authy’s best-in-class, strong authentication capability removes this complexity.”

Lawson also noted that integrating Authy’s service with Twilio will give users a better self-service and policy-management experience, as well as features like mobile phone-based TOTP [time-based one-time passwords]. “In short, Authy had already built the solution we would have built and we found that the Authy team is exactly like Twilio in their developer focus on how they value the API approach,” Lawson added.

For the time being, very little will change for current Authy customers. Twilio’s users, however, will soon be able to profit from the integration between the two services. A number of Twilio customers, after all, have already built their own two-factor authentication services that use Twilio’s SMS and voice services. They will soon be able to do away with those (after a bit of engineering work, I would imagine) and choose Authy as a product option on

Authy’s investors, who put about $3.8 million into the company, include the likes of, Box Founder Aaron Levie, Sam Yagan, CrunchFund, Startcaps Ventures, Idealab, Winklevoss Capital and AngelList (CrunchFund was founded by TechCrunch founder Mike Arrington).