Bitwarden, an open source password manager for enterprises and consumers, has raised $100 million in a round of funding led by PSG, with participation from Battery Ventures.
Founded initially back in 2015, Santa Barbara, California-based Bitwarden operates in a space that includes well-known incumbents such as 1Password, which recently hit a $6.8 billion valuation off the back of a $620 million fundraise, and LastPass, which was recently spun out as an independent company again two years after landing in the hands of private equity firms.
In a nutshell, Bitwarden and its ilk make it easier for people to generate hard-to-guess passwords automatically, and store them all in a secure digital vault — it’s all about helping people avoid reusing the same predictable password across all their online accounts.
On top of its basic free service, which gives individuals access to unlimited password storage across platforms, Bitwarden ships a bunch of paid-for premium tools and services, including advanced enterprise features like single sign-on (SSO) integrations and identity management. Bitwarden’s big differentiator, of course, lies in the fact that it’s built atop an open source codebase, which for super security-conscious individuals and businesses is a good thing, as it allows them to fully inspect the inner-workings of the platform. Moreover, people can contribute back to the codebase and expedite development of new features.
It’s worth noting that today’s “minority growth investment” represents Bitwarden’s first fully disclosed external funding in its seven year history, though TechCrunch is reliably informed that the company did in fact raise a hitherto undisclosed Series A round back in 2019.
Its latest cash injection, however, is indicative of how the world has changed in the past few years — the rise of remote work means that people often mesh personal and work accounts on the same devices, while they may use the same password across their myriad online accounts. Such poor password hygiene puts businesses at risk, which is why they’re looking for ways to encourage their workforce to use security-focused tools such as password managers instead.
“Our investment in Bitwarden reflects our conviction that the password management market is poised for considerable growth as online account use grows and security concerns mount in the hybrid working environment,” PSG managing director Tom Reardon noted in a press release.
Additionally, growing competition and VC investments in the password management realm means that Bitwarden can’t rest on its laurels — it needs to expand, and that is what its funds will be used for. The company confirmed plans to extend its offering into several aligned security and privacy verticals, including secrets management — something that 1Password expanded into last year via its SecretHub acquisition.
“The timing of the investment is ideal, as we expand into opportunities in developer secrets, passwordless technologies, and authentication,” Bitwarden CEO Michael Crandell said. “Most importantly, we aim to continue to serve all Bitwarden users for the long haul.”