Passbolt Raises $8M to Enhance Open Source Password Management for Teams

Password Management for Teams: Passbolt Secures $8 Million Seed Funding

Password managers are now widely adopted. However, the requirements of businesses frequently diverge from those of individual consumers. Teams routinely need to share login credentials for resource access, necessitating robust control mechanisms for IT and security departments.

Passbolt, a company focused on providing password management solutions, has announced an $8 million seed round on Thursday. Their goal is to establish themselves as the leading password manager specifically designed for small and medium-sized businesses, with future aspirations to extend their services to larger enterprises.

Addressing the Gaps in Existing Solutions

CEO Kevin Muller, originally from France, contends that current market offerings, such as Bitwarden or 1Password, are primarily geared towards individual users. He argues that these solutions often lack the integrated functionality needed by organizations.

“Many tools offer basic password management for employees, then a separate ‘secret manager’ for DevOps, and yet another solution for authentication,” Muller explained. “This fragmentation creates interoperability issues, as these systems typically operate in isolation.”

Muller’s background includes founding the e-learning platform Click on French and leading a web development consultancy in India. He initiated Passbolt in 2017, collaborating with Remy Bertot and Cédric Alfonsi, building upon earlier prototypes of the open-source community edition.

Building on a Solid Foundation

The Passbolt service leverages the popular open-source password manager, KeePass, as a foundation. However, Muller emphasizes that KeePass wasn’t initially designed for team collaboration.

While KeePass is already favored by technical teams, it typically generates a single, static file for secure credential storage. Sharing this file is straightforward, but it lacks the ability to control access or audit user activity effectively.

“Our aim was to enhance collaboration, bolster security, and provide greater control,” Muller stated. “This includes the ability to deploy the system behind a firewall, ensure interoperability, and share credentials – including passwords and secrets – with granular permissions.”

Expanding Features and Future Goals

Over recent years, the Passbolt team has integrated features such as native desktop applications, password expiration and rotation, two-factor authentication code generation, and role-based access controls within their user interface.

Currently, they are developing support for managing passkeys, a next-generation authentication method. Long-term, Passbolt intends to compete with established Privileged Access Management (PAM) providers like CyberArk.

Passbolt provides a free, self-hosted community edition, alongside a Pro edition ($49/month for 10 seats) offering features like LDAP provisioning, single sign-on support, and activity logs. A hosted solution is also available, starting at $54 per month for 10 seats.

User Base and Financial Performance

Approximately 38,000 teams utilize the free version, while 2,000 subscribe to Passbolt’s paid services. A significant majority (75%) of users choose to self-host the solution.

The company’s code undergoes regular security audits, and Passbolt holds SOC2 Type II certification, demonstrating their commitment to security standards.

Based in Luxembourg with a team of around 30 employees, Passbolt achieved profitability in the summer of 2024. The new funding will be used to accelerate growth and address user feature requests.

Investment Details

The Series A funding round was spearheaded by Airbridge Equity Partners, based in the Netherlands. Existing investors, including Expon Capital’s Digital Tech Fund, ScaleFund, Seeder, Dedicated, Bondi Capital, Carricha Capital, and LBAN, also participated.

Angel investors Christophe Bianco (co-founder of Excellium Services) and Xavier Buck (co-founder of Datacenter Luxembourg) also contributed to the round.

“Traditional password managers and PAM solutions often fall short for modern, distributed teams,” stated Rick van Boekel, managing partner at Airbridge Equity Partners. “Passbolt’s organic growth demonstrates a clear demand for a collaborative, enterprise-grade solution, and their SaaS metrics highlight user satisfaction.”