By Jane Lanhee Lee
-Toronto-based 1Password said on Wednesday it had raised $620 million in a funding round led by investment firm ICONIQ Growth, which more than tripled its valuation, as the cybersecurity startup aims for strategic acquisitions to boost its growth.
Hollywood stars including Ryan Reynolds, Scarlett Johansson, Robert Downey Jr and Ashton Kutcher also participated in one of the largest rounds in the security funding space that valued the company at $6.8 billion.
The funding comes at a time the pandemic-driven work-from-home trend nears two years, during which 1Password more than tripled its headcount to cater to companies’ increased data security challenges.
The company expects to double its headcount of about 570 this year, Chief Executive Officer Jeff Shiner said, as it looks to further capitalize on growing cybersecurity needs.
1Password will use the new funds to develop and scale human-centric security solutions and help people easily protect their most sensitive data and information.
The 16-year-old company had raised $100 million in July last year, valuing it at $2 billion, in a funding round backed by Meta Platforms Inc and Spotify investor Accel Partners.
1Password’s technology makes it easier for employees to log into their company systems, while providing employers visibility into what apps workers download without permission from their IT teams. When employees leave the company the tech makes it easy to ensure they don’t have access to the company systems.
1Password had started out as a consumer password management app, and expanded into building a product for businesses in 2015 that now accounts for a large chunk of its revenue. Its roster of clients includes IBM Corp, workplace messaging app Slack and Shopify Inc.
It competes with companies including LastPass, NordPass and SafeInCloud which also promise businesses and consumers secure password management.
“Over the last couple of years, everybody has a higher level of inherent stress just from what’s going on in the world. And I think we’re starting to see some of the implications of that from a security point of view,” Shiner said.
In October, 1Password surveyed 2,500 North American adults who work full-time primarily through computers and the results showed that burned-out employees are a third less likely to follow companies’ security guidelines than other workers, including downloading unapproved apps.
“Our mission has always been to ease the tension between security and convenience, and the opportunity to deliver on this has never been bigger for 1Password,” Shiner added.
According to the 2020 Verizon Data Breach Investigations Report, 85% of all company data breaches involved a human element, underscoring the need to design security products around individuals, not infrastructure, the statement added.
The company said Tiger Global, Lightspeed Venture Partners, and Accel also joined the latest funding round. Tiger Global has been heavily betting on tech startups to cash in on upcoming market winners and potentially reap greater returns.