Auth0 is raising another big swath of cash as demand for its identity authentication software rises amid the COVID-19 pandemic.
The Seattle-area startup just raised a $120 million Series F round led by Salesforce Ventures that increases its valuation to $1.9 billion. This comes after a $103 million round in May 2019. Total funding to date for the 7-year-old company is more than $330 million.
The pandemic has accelerated the adoption of digital technologies across a variety of industries. Companies are connecting more and more with customers in the cloud — and that means opportunity for Auth0.
Auth0 combines existing login and identity verification options into a few lines of code that developers can quickly add to their applications. Its platform includes services like single sign-on, two-factor authentication, password-free login capabilities, and the ability to detect password breaches.
Whether it’s healthcare companies doing more virtual appointments or schools moving education online, there’s a need for identity security as organizations go digital. On top of that, there is an increase in data hacking attacks as more high-value transactions and information move online.
“You need to know who the users are, and you need to protect those users,” said Auth0 CEO and co-founder Eugenio Pace. “That’s exactly what we do.”
Pace said the company beat its original Q2 revenue projections made at the start of 2020, even with an ongoing economic and health crisis.
“The demand is massive,” he said.
Auth0 didn’t need to raise another round this year. But the extra capital will help the company press the gas pedal down even more.
“It accelerates our growth and allows us to be bolder, to take even higher risks in new areas,” Pace said.
The investment from Salesforce Ventures, the VC arm of Salesforce, is validation for the company’s progress and vision for the future, Pace said. Auth0 and Salesforce already have several joint customers.
“Auth0’s expertise in end-to-end identity products is well-aligned with Salesforce’s Customer 360 platform,” John Somorjai, EVP, Corporate Development & Salesforce Ventures at Salesforce, said in a statement.
Salesforce Ventures recently joined a funding round for Outreach, another Seattle unicorn startup.
Auth0 customers come from a bevy of industries across the globe. They include Atlassian, The Economist, Siemens, AMD, Mazda, LATAM Airlines, and others. Auth0 processes more than 4.5 billion login transactions per month.
The startup competes with various other big players: Okta went public in 2016 and is now valued at about $25 billion. Pace’s former employer Microsoft also does business in this market with its Active Directory product. Other similar startups include Onfido, Socure, Evident, Jumio, and more. McKinsey last year estimated the ID-verification-as-a-service market reaching $16-to-20 billion by 2022.
Auth0’s secret sauce is a combination of taking a developer-first approach and making it easy to implement its software into any scenario. Pace said it’s a “no-brainer” for companies to use Auth0 versus building their own identification solutions.
“What Stripe did for payments, what Twilio did for messaging and voice, what SendGrid did for email — we do the same for authentication and authorization,” Pace said.
Auth0 doesn’t have a specific goal of going public, but Pace said he expects the company to achieve IPO “readiness” by early 2022.
The startup, one of a handful of “unicorns” in the Seattle region, has avoided layoffs this year and instead has hired more than 100 new workers. It employs about 650 people across six offices.
Auth0 is currently ranked No. 6 on the GeekWire 200, our index of top Pacific Northwest startups.
Pace became an entrepreneur in his native Argentina, where his first startup didn’t quite take off the way Auth0 did. He moved on to multiple roles at Microsoft over a 12-and-a-half-year period, became a U.S. citizen, and decided it was time to gamble again on starting something.
Pace helped co-found the company in 2013 with Matias Woloski and took over as CEO in December 2017.
Others participating in the Series F round were DTCP, another new investor, and existing backers including Bessemer Venture Partners, Sapphire Ventures, Meritech Capital, World Innovation Lab, Trinity Ventures, Telstra Ventures, and K9 Ventures.
Despite the pandemic, venture capitalists are pouring money into Pacific Northwest tech companies at unprecedented levels, significantly outpacing the number of deals and dollars invested in the first half of 2018 and 2019, according to a recent GeekWire analysis.
A survey of 37 chief financial officers from Seattle-based companies indicates that the city’s tech industry remains strong amid the COVID-19 crisis.