The average person has 100 passwords across various sites and platforms; growing 25% in the last year alone with the rush to digital increasing the number of online services being consumed, leading to more passwords to remember. Beyond Identity, founded by internet veterans Jim Clark (Netscape) and TJ Jermoluk (@Home Network), is building a future that isn’t reliant on passwords. Initially addressing the enterprise, the company offers a scalable, frictionless, and secure passwordless continuous authentication coupled with a risk policy-based authentication model. The cloud-based solution is more secure than password managers and two-factor authentication.
AlleyWatch caught up with Chief Marketing Officer Patrick McBride to learn more about the state of the identity management market, the company’s future plans, and latest funding round, which brings the total funding raised to $105M.
Who were your investors and how much did you raise?
Beyond Identity has raised $75 million in Series B funding from investors New Enterprise Associates (NEA), Jim Clark, and Koch Disruptive Technologies, LLC (KDT).
Tell us about the product or service that Beyond Identity offers.
Beyond Identity’s first-of-its-kind, advanced Passwordless Identity Management Platform dramatically improves security and provides a frictionless login experience for customers. The platform replaces passwords with fundamentally secure X.509-based certificates and extends the Chain of Trust™ to users and their endpoint devices, enabling continuous, risk-based authentication and authorization. As a result, compliance teams receive a complete, immutable record of user identity, the device they were authenticated from, and the security posture of the device at the time of login.
The Beyond Identity platform makes passwordless identity management available across any business context. It works on all device types (Windows, macOS, iPadOS, iOS, and Android) to provide workforces with secure, passwordless login to domain-joined desktops and industry-leading SSO applications. Beyond Identity also offers streamlined, passwordless authentication for an organization’s customers, protecting their data and eliminating fraud from compromised accounts (e.g. credential stuffing attacks).
Beyond Identity’s Passwordless Identity Management Platform is a cloud-native solution with an advanced, standards-based architecture that drastically reduces implementation time and costs – enabling customers to increase business velocity, implement new business models, and reduce operating costs.
What inspired the start of Beyond Identity?
Nearly 25 years ago, Cofounders and Silicon Valley icons Jim Clark (Cofounder of Netscape) and Tom “TJ” Jermoluk (Chairman/CEO of @Home Network) helped establish the commercial internet as we know it today, which (rather ironically) gave rise to the mainstream use of password-based authentication in the first place. After recognizing the severe vulnerabilities and financial repercussions tied to today’s most widely accepted authentication method, the pair founded Beyond Identity in 2019 to not only eliminate security’s worst kept secret, the password, but also to ensure companies adopt a fundamentally strong, continuous authentication method in its place that reduces risk and protects user privacy.
How is Beyond Identity different?
Passwords are globally reviled and inherently insecure. Exacerbating the issue, user frustration with password security workarounds – including frequent forced changes, longer/stronger passwords, password managers, and multi-factor authentication (MFA) – drives them away or encourages unsafe behaviors. Beyond Identity was created to replace password authentication altogether.
The company is delivering, for the first time, a fundamentally secure solution (based on industry-standard certificate chains) for passwordless identity management that requires no changes to security infrastructures, completely removes login friction for end-users, and provides customers with a much more secure alternative to password managers. Instead of simply providing workarounds or patches for the password issue, Beyond Identity actually eliminates passwords altogether and reduces this significant source of risk for companies.
What market does Beyond Identity target and how big is it?
Beyond Identity targets the identity and access management (IAM) market, which multiple analyst firms size in excess of $20 billion and state to be growing rapidly. Initially launched to help enterprises dramatically improve the security of their workforce and customer base’s authentication practices, Beyond Identity plans to use part of their Series B funding round to begin assisting individual consumers, who have been unfortunate victims to today’s exponential rise in data breaches and credential stuffing attacks.
What’s your business model?
Beyond Identity’s advanced Passwordless Identity Management Platform is sold as an annual subscription SaaS based on per user/per month pricing. The company sells directly at the moment but aims to have channel partners manage the majority of its sales as growth continues over the next few years.
Beyond Identity has a customer-centric business model that prioritizes satisfaction. Trust in our relationships with our customers is built through openness, honesty, and personal accountability. Our engineering team is also driven by a relentless curiosity to constantly innovate and perfect our solution. We have been actively recruiting professionals in all departments since our launch and expect our workforce to more than double over the next year.
How has COVID-19 impacted the business?
The COVID-19 pandemic has been an accelerant for many segments of the cybersecurity market due to the sudden and massive move to remote work, the lack of organizational preparedness, and the reality that much of the population may remain remote permanently. For the market opportunity that Beyond Identity is addressing in identity and authentication, the need has become even more urgent. The opportunity to establish clear leadership and to double down on expansion and innovation is what drove the company to take a second round of funding now and not next year. Even pre-COVID, the market was beginning to pursue passwordless technology at different levels, but the disruption has shifted priorities. Analyst firms like Gartner have placed both remote workforce security and passwordless authentication among the Top 10 critical security projects planned for 2020-2021. Particularly with their most recent funding, Beyond Identity now has the opportunity to separate itself from the market.
The COVID-19 pandemic has been an accelerant for many segments of the cybersecurity market due to the sudden and massive move to remote work, the lack of organizational preparedness, and the reality that much of the population may remain remote permanently. For the market opportunity that Beyond Identity is addressing in identity and authentication, the need has become even more urgent.
What was the funding process like?
Beyond Identity’s Series B round saw the return of Series A investors New Enterprise Associates (NEA) and Koch Disruptive Technologies, LLC (KDT). Beyond Identity co-founder Jim Clark also contributed funding for the Series B round.
What are the biggest challenges that you faced while raising capital?
There were no real challenges.
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What factors about your business led your investors to write the check?
Being early customers themselves, both NEA and KDT have experienced the ease-of-use and seamless integration of Beyond Identity’s Passwordless Identity Management Platform first-hand. The two investors also recognized the increased demand for cybersecurity controls as companies rapidly shifted to work-from-home structures during the COVID-19 pandemic. “The past seven months have been a challenging time and have forced organizations to rapidly adjust to supporting fully remote workforces, a change that will be largely permanent,” said Forest Baskett, General Partner at NEA. “The industry was moving incrementally in the direction of passwordless approaches, but Beyond Identity’s innovation leapfrogged all others with an elegant architecture and powerful solution. As investors, the opportunity to ride that wave with the leadership team they have assembled was simply too hard to ignore.”
What are the milestones you plan to achieve in the next six months?
Beyond Identity’s workforce is rapidly growing and we expect to more than double in size by the end of 2021. As our customer base continues to grow as well, the company is looking at new targets outside of large enterprises, including smaller organizations and individual consumers.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Invest in innovation. You should continuously work to perfect your product or service while paying close attention to current trends and your customers’ needs.
Where do you see the company going now over the near term?
Since launching in April 2020, Beyond Identity has solely operated in North America. With the most recent funding round, the company aims to expand sales internationally, starting with Europe and later Asia, as well as build stronger channel and partner programs.
What’s your favorite outdoor dining restaurant in NYC?
Archer & Goat is an excellent spot for brunch, and they are one of the few NYC restaurants offering heated outdoor seating at the moment.