Funding for cybersecurity startups continues to look bleak. According to a recent Crunchbase survey, companies in the digital security space raised 30% less funds — $1.9 billion — in Q3 2023 compared to Q3 2022.
But some startups are bucking the trend.
Case in point, FusionAuth, a company that provides authentication and user management tools for developers, today announced that it raised $65 million in a funding round led by Updata Partners. It’s FusionAuth’s first tranche of outside capital in its five-year history; prior to this, the company — which is profitable — had been completely bootstrapped.
“This was the right time to partner with Updata because it allows us to hire and scale more quickly to address increasing demand from millions of developers and businesses like Stihl, Oppenheimer, Clover and Zenni Optical,” CEO Brian Pontarelli told TechCrunch in an email interview. “We’ll use this investment to expand our go-to-market and product development efforts and tap into our partner networks and build out a more formal channel program.”
As for Updata, it felt that FusionAuth’s customer list and track record made its investment in the company an “easy decision.”
“FusionAuth is solving a clear pain point with its straightforward approach to customer identity management,” Dan Moss, a principal at Updata Partners, said. “Its feature-rich platform simplifies authentication complexities and removes friction in 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 capabilities to developers.”
FusionAuth’s developer tools. Image Credits: FusionAuth
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 fill it.
FusionAuth builds customer identity tools, allowing engineering and product teams to add registration, login and user management features to apps. The tools can be deployed on most computers, according to Pontarelli, enabling developers to run them locally, on virtual and cloud servers or on dedicated hardware — even without an internet connection.
FusionAuth offers APIs and software development kits for multi-factor authentication, passwordless login, passkey support and machine-to-machine authentication.
“Development teams don’t have the time or the expertise to build and scale their own auth solutions,” Pontarelli said. “FusionAuth solves this problem with a solution accessible to anyone while being robust enough for the most demanding organizations.”
Pontarelli sees FusionAuth as competing with some of the native identity tools in the customer identity and access management industry, such as Amazon Cognito, Microsoft Entra ID and Google Firebase, as well as legacy providers like Okta. But he makes the case that FusionAuth offers more sophisticated functionality than many of its rivals, including passwordless authentication through passkeys, single-tenant infrastructure and configurable password encryption.
It’s a sales pitch that’s evidently resonating. FusionAuth has more than 450 paying customers today while its free community edition has over 13 million downloads. Revenue has been doubling every year since FusionAuth’s founding, Pontarelli claims.