Axiad, a provider of a cloud-based passwordless authentication solutions, has raised $20 million in growth funding from private equity firm Invictus Growth Partners.
As its first outside financing, the proceeds will be used to support sales, marketing and development of its multi-factor authentication platform.
According to Yves Audebert, co-founder and co-CEO of Santa Clara, Calif.-based Axiad, the company has been bootstrapped and cash flow positive for more than ten years, with the company saying it protects more than 2.5 million enterprise credentials for hundreds of customers.
Axiad helps customers enable the passwordless experience for popular enterprise authentication methods, including biometrics, PKI, Mobile MFA, YubiKeys, TPM, smart cards, and others.
“Axiad’s cloud platform manages every credential’s lifecycle holistically in one place, providing a cohesive experience for the business and its users, including privileged and non-privileged users,” the company explains. “Axiad secures all digital interactions for both users and machines no matter where they are.”
The decision to raise outside capital was a big decision, Audebert said, but doing so will help it compete in a market of well-funded security companies offering similar solutions. Just last month, Beyond Identity, who is also on a quest to eliminate passwords, announced a $75 million Series B funding round, bringing the total investment in the company to $105 million.
According to Jim Ducharme, Vice President of Identity Products at RSA, the future is passwordless. “That’s the inevitable conclusion I think more and more people are reaching as we watch passwordless standards become more firmly established and passwordless authentication methods grow in number and sophistication,” he wrote in a late 2019 SecurityWeek column.
Ducharme also reminds us of the challenges to consider with going passwordless. “For example, how do you prove identity for credentials enrollment in a world that doesn’t use passwords? And how do you recover lost credentials? Perhaps one of the most important considerations is how to address these challenges without recreating some of the very issues that doomed passwords in the first place – like the user inconvenience, help desk burden and costs associated with password resets. We must be vigilant not to simply end up replacing password resets with different, but equally onerous, methods. It’s still too early in the game to know precisely how we’ll address all these issues in a meaningful way. But it’s not too early to start exploring.”