San Francisco-based authentication startup Stytch has raised $90 million in additional VC funding and has acquired a fellow passwordless authentication startup.
The company has been developing an API and SDK platform to help clients easily implement passwordless authentication into their apps. Notably, it was founded by two former employees of renowned financial IT services provider Plaid – Reed McGinley-Stempel, who served as a Product Manager at the firm, and former Plaid engineer Julianna Lamb.
Stytch raised $30 million in a Series A funding round led by Thrive Capital earlier this year. The company said it planned to use the money to fuel R&D activities, and to make important new hires.
Stytch’s just-closed Series B was led by Coatue Management, which also participated in the Series A, and featured contributions from Benchmark Capital, Index Ventures, and, again, Thrive, all of which were involved in the Series A.
“We believe the world of online identity is undergoing a sea change and are impressed with Stytch’s API-driven approach to blending authentication into product experiences,” explained Coatue Management General Partner Lucas Swisher. “We are excited to partner with Stytch as they pioneer us toward a passwordless future.”
In its announcement, Stytch said the funding would be used to enable the company to “continue to build tools and infrastructure” enabling streamlined integration of authentication tools into apps and websites. The company also announced its acquisition of Cotter “[a]s part of the funding”.
Just two years old, Cotter is also a startup focused on passwordless authentication, offering tools that enable login via mobile app prompts, One-Time Passwords, magic links, and WebAuthn-based biometric authentication. Stytch explained that the acquisition will combine the two startups’ technologies.
Stytch currently has a user base of over 3,500 developers building solutions using the Stytch platform, according to McGinley-Stempel, who serves as the company’s CEO.