Bitwarden, an open-source password manager, has raised $100 million as the rise of remote work and our increasingly online lives boosts demand for digital security tools.
Growth equity firm PSG led the funding round and was joined by Battery Ventures, an existing investor in Bitwarden. The raise is Bitwarden’s first publicly-disclosed external funding since the Santa Barbara-based company launched in 2015.
Between work and personal needs, people must manage a growing number of online credentials. Too often, people reuse the same passwords across several accounts, putting consumers and businesses at risk of fraud and cyberattacks. Bitwarden offers free and paid tools to more safely store unique credentials, generate hard-to-guess passwords and transfer sensitive data to other people.
The 125-person company competes against incumbents like LastPass and 1Password in a market that’s expected to nearly quintuple to more than $7 billion by 2030, according to Straits Research. Tech titans like Apple and Google also offer password management tools within their browsers and devices—with Apple recently announcing plans to eventually ditch passwords altogether.
Bitwarden aims to stand apart by offering free and cheaper plans than its rivals, with premium subscriptions starting at $10 per year for individuals and $5 per month per user for enterprises. The company also makes its software open-source, so people can examine the security of the platform themselves. Bitwarden pays for third-party audits and partners with a company to regularly scrutinize the code, all in an effort to showcase to customers that the software is sound, Chief Customer Officer Gary Orenstein told dot.LA.
“[Open-source] is the only way that you can provide 100% transparency, to get you to the maximum amount of trust in the relationship of customers using your software,” Orenstein said. “If it's not open source, how do you know it's secure?”
The company plans to use the fresh funds to develop its tools, grow its global customer base and secure more with partnerships with tech resellers and other third-parties. In addition to password management, the firm has expanded into services like Bitwarden Send, which lets people send encrypted text and files that can self-delete. Bitwarden is also among the companies working to expand passwordless security options, such as using fingerprints or codes sent to devices instead of remembering a single password.
Orenstein said Bitwarden saw a boost in business when companies sent their employees home to work remotely during the pandemic. That trend, along with high-profile data breaches, has businesses and individuals seeking out security tools like Bitwarden’s, Orenstein said.
“We've seen recognition from the business IT teams that we're dealing with people who are going to be in different places, connecting over different networks, and we need to enable them to provide the most appropriate security,” Orenstein said.
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