Magic, a San Francisco-based startup that builds "plug and play" passwordless authentication technology, has raised $27 million in Series A funding.
The round, led by Northzone and with participation from Tiger Global, Volt Capital, Digital Currency Group and CoinFund, comes just over a year after Magic launched from stealth, rebranding from its previous name Formatic.
The company, like many others, is on a mission to end traditional password-based authentication. Magic’s flagship SDK, which launched in April 2020, enables developers to implement a variety of passwordless authentication methods with just a few lines of code and integrates with a number of modern frameworks and infrastructures.
Not only does the SDK make it easier for companies and developers to implement passwordless auth methods in their applications, but it could also help to mitigate the expensive fallout that many have to deal with as a result of data breaches.
“This is why the password is so dangerous," Sean Li, Magic co-founder and CEO tells TechCrunch. "It’s like a Jenga tower right now — a hacker breaching your system can download an entire database of encrypted passwords, and then easily crack them. It’s a huge central point of failure.”
The company recently built out its SDK to add support for WebAuthn, which means it can support hardware-based authentication keys like Yubico, as well as biometric-based Face ID and fingerprint logins on mobile devices.
“It’s less mainstream right now, but we’re making it super simple for developers,” says Li. “This way we can help promote new technologies, and that’s really good for user security and privacy.”
It's a bet that seems to be working: Magic has recorded a 13% month-over-month increase in developer signups, and the number of identities secured is growing at a rate of 6% weekly, according to Magic. It has also secured a number of big-name customers, from crypto news publisher Decrypt to fundraising platform Fairmint.
Wendy Xiao Schadeck, a partner at Northzone said: “We couldn't be more excited to support Sean and the Magic team as they redefine authentication for the internet from the bottom up, solving a core pain point for developers, users, and companies.
“It was clear to us that they're absolutely loved by their customers because the team is so obsessed with serving every single part of the developer journey across several communities. What's potentially even more exciting is what they will be able to do to empower users and decentralize the identity layer of the web.”
The company now plans to continue to scale its platform and expand its team to meet what Magic describes as “soaring” demand. The startup, which currently has 30 employees that work remotely on a full-time basis, expects to at least double its headcount across all core functions, including product, engineering, design, marketing, finance, people and operations.
It’s also planning to build out the SDK even further; Li says he wants to be able to plug into more kinds of technology, from low-code applications to workflow automations.
“The vision is much bigger than that. We want to be the passport of the internet,” Li adds.