Capital may be harder to come by than it once was in startups, but some companies are bucking the trend – hard. Take Descope, for example, which today announced that it has raised a whopping $53 million in seed funding for its “developer-first” user authentication and management platform.
The money came from Lightspeed Venture Partners and GGV Capital with additional funding from Dell Technologies Capital, TechAviv, J Ventures, Cerca, Unusual Ventures, Silicon Valley CISO Investments and individual investors George Kurtz, CEO of CrowdStrike, and John W Thompson, president of Microsoft. According to Descope co-founder and CEO Slavik Markovich, it will be used to develop Descope’s product capabilities, invest in research, and support open source initiatives around authentication, authorization, and data management. users.
“The Descope platform helps developers add authentication, user management, and authorization capabilities to their business-to-consumer and business-to-business applications with just a few lines of code,” said Markovich. to TechCrunch in an email interview. “It helps applications accelerate their time to market, increase the efficiency of their engineering resources, reduce user friction, and prevent a wide variety of identity-based cyberattacks.”
Why the massive infusion of cash — especially important for a seed round — into a development-focused startup, you might ask? Markovich says it was a matter of timing. In tight economies, companies are feeling the pressure to shift software development efforts to initiatives that will drive business forward. Descope allows them to do this, Markovich says, by outsourcing many necessary—but non-revenue-generating—authentication and user management application components, freeing up development teams.
Descope was founded last April by members of the core team that built the Demisto security operations platform, which Palo Alto Networks acquired in March 2019. At Demisto, the team says it has Experienced the pain of building user authentication and management functionality — including password management, single sign-on, tenant management, and roles and permissions — first-hand. It turned into a multi-year investment, Markovich says, not to mention a huge waste of time.
“With Descope, the team’s vision is to ‘deframe’ (hence the name) authentication and user management from the day-to-day work of every application developer, so that they can focus on initiatives business-critical without worrying about creating, updating and maintaining authentication,” Markovich said.
Markovich doesn’t deny that there are a host of competitors in the user authentication space, like ConductorOne, Stytch, Transmit Security and Okta-backed Auth0. (In 2021, venture capital investments in identity management startups reached $3.2 billion, according to Crunchbase — a record at the time.) But he says Descope differentiates itself through its workflow and its screen editor, which are drag-and-drop as opposed to code – and intended to allow developers to customize authentication flows for apps without having to write code.
“This dramatically speeds up time to market and also makes it easier to change and update user journey flows over time,” Markovich said. “These no-code workflows remove the complexity of creating authentication while leaving app makers in control of their user experience and UI.”
Beyond editors, Descope offers a set of SDKs and APIs that allow customers to add passwordless authentication methods (think biometrics, risk-based authentication, and multi-factor authentication) to existing applications and services. Security teams get application security feeds that they can review and verify for compliance.
So why launch Descope now? There’s no shortage of rival apps, after all. But Markovich says the team felt the industry had reached an inflection point. More than 66% of smartphone users are expected to use device-native biometrics instead of passwords by 2024, he noted, citing data from Mercator, while authentication protocols such as FIDO2, WebAuthn and Passkeys laid the foundation for a passwordless future. The next step, according to Markovich, is to allow developers to easily add passwordless authentication methods alongside others such as social logins, one-time passwords and magic links to their apps.
There is demand to be sure. According to a recent Enterprise Strategy Group survey, 85% of IT and cybersecurity professionals agree that adopting passwordless technology is among their top strategic initiatives.
“Passwords are not only the number one cause of security breaches, but are also known to cause friction throughout the user journey, leading to churn and a negative experience for end customers,” Markovich continued. “The proliferation of cybersecurity attacks due to poor identity and authentication practices such as credential stuffing, bot attacks, session hijacking, brute force attacks and other types password compromise. Authentication and user management are essential parts of any digital application.”
It’s a tough time to launch a startup regardless, with less access to capital and uncertainty around the broader economic landscape. Descope doesn’t have much appeal to report either – the platform is in private beta and Markovich declined to comment on the company’s revenue or customer base.
Still, Markovich says Descope is “well placed” to weather a tech downturn, and perhaps even uniquely positioned given that tough economies often come with an increase in fraud and cyberattacks. .
“The Descope team is full of seasoned startup traders who have built businesses in both bull and bear markets,” Markovich said. “They have experience allocating capital to initiatives that drive business forward in a sustainable, customer-centric and efficient way.”
We’ll have to wait and see if that turns out to be the case.
