Stytch Raises $90M Series B at $1B Valuation

Stytch Secures $90 Million in Series B Funding

Stytch, a startup specializing in API-first passwordless authentication, has successfully raised $90 million in a Series B funding round.

This new investment elevates the company's valuation to over $1 billion.

Investment Details and Growth

Coatue Management LLC spearheaded the funding, with contributions from existing investors including Benchmark Capital, Thrive Capital, and Index Ventures.

This round follows a $30 million Series A raise in July, which valued the company around $200 million.

Since the Series A, Stytch has experienced substantial growth, with developer adoption of its platform increasing by approximately 1,000%.

The number of developers utilizing the platform has risen from 350 in July to roughly 4,000 in November.

The API-First Advantage

According to the company’s CEO, Reed McGinley-Stempel, the core driver of this growth is its API-first approach.

“Many other passwordless solutions are heavily focused on widgets, which introduces limitations,” explains McGinley-Stempel, a former employee of Plaid.

“Our experience with non-API-first products highlighted these constraints, prompting us to prioritize a more flexible architecture.”

Unexpected Use Cases

Stytch has discovered unexpected applications for its technology.

One prominent example is the integration into checkout flows, enabling users to create accounts with SMS passwords or email verification instead of opting for guest checkout.

New Product Launches

Since the Series A funding, Stytch has expanded its product offerings.

New features include support for Sign In with Apple, Google, and Microsoft, as well as embeddable magic links and one-time passcodes delivered via email.

This week, the company is also introducing support for WebAuthn, enabling compatibility with hardware-based authentication keys like Yubico, alongside biometric logins such as Face ID and fingerprint scanning.

Strategic Acquisition and Future Plans

Stytch intends to further develop its platform in the coming months.

As part of the Series B raise, the company acquired Cotter, a no-code passwordless authentication platform backed by Y Combinator.

This acquisition will streamline the adoption of passwordless technologies for developers.

The funding will also be allocated to expanding the 30-person team and enhancing the company’s infrastructure.

Competitive Landscape

Stytch is not alone in its pursuit of eliminating passwords.

Transmit Security secured $543 million in June, marking what was considered the largest Series A investment in cybersecurity history, for its natively passwordless identity and risk management solution.

In July, Magic, a San Francisco-based startup focused on “plug and play” passwordless authentication, announced a $27 million Series A funding round.