Descope, a startup that provides passwordless authentication, raises $53 million in a seed round

Some startups are defying the trend of scarcer capital. Descope, a “developer-first” authentication and user management platform, raised $53 million in seed funding today.

Lightspeed Venture Partners, GGV Capital, Dell Technologies Capital, TechAviv, J Ventures, Cerca, Unusual Ventures, Silicon Valley CISO Investments, and CrowdStrike CEO George Kurtz and Microsoft chairman John W. Thompson invested. Descope co-founder and CEO Slavik Markovich says it will be used to expand product capabilities, invest in research, and support open source authentication, authorization, and user management initiatives.

Markovich told in an email that the Descope platform lets developers add authentication, user management, and authorization to their business-to-consumer and business-to-business apps with a few lines of code. “It helps apps accelerate their time to market, increase engineering resource efficiency, reduce user friction, and prevent a wide variety of identity-based cyberattacks.”

Why the large seed round for a dev-focused startup? Timing, says Markovich. In tight economies, companies must prioritize business-driven software development. Markovich says Descope frees up dev teams by outsourcing many necessary but non-revenue-generating authentication and user management app components.

Palo Alto Networks acquired Demisto in March 2019, and its core team founded Descope last April. The Demisto team experienced the pain of building authentication and user management functionality, including password management, single sign-on, tenant management, and roles and permissions. Markovich says it was a multiyear investment and time drain.

“With Descope, the team’s vision is to ‘descope’ (hence the name) authentication and user management from every app developer’s daily work, so they can focus on business-critical initiatives without worrying about building, updating, and maintaining authentication,” Markovich said.

ConductorOne, Stytch, Transmit Security, and Okta-backed Auth0 compete in user authentication, Markovich acknowledges. Crunchbase reported a record $3.2 billion in VC investment in identity management startups in 2021. He claims that Descope’s drag-and-drop workflow and screen editor allow developers to customize app authentication flows without writing code.

“This greatly speeds up time to market and also makes it easier to modify and update user journeys flows over time,” Markovich said. These no-code workflows simplify authentication while giving app builders control over their user experience and interface.

Beyond the editors, Descope offers software development kits and APIs that allow customers to add passwordless authentication methods like biometrics, risk-based authentication, and multifactor authentication to existing apps and services. Security teams receive app security flows for compliance auditing.

Why launch Descope now? Competing apps abound. Markovich says the team felt the industry had reached an inflection point. According to Mercator, 66% of smartphone users will use device-native biometrics instead of passwords by 2024, and authentication protocols like FIDO2, WebAuthn, and passkeys have laid the groundwork for a passwordless future. Markovich believes that developers should be able to easily integrate passwordless authentication with social logins, one-time passwords, and magic links.

Demand exists. Enterprise Strategy Group found that 85% of IT and cybersecurity professionals consider passwordless technology a strategic initiative.

“Passwords are not only the leading cause of security breaches, but they also cause friction throughout a user journey—leading to churn and a negative experience for end customers,” Markovich said. Poor identity and authentication practices like credential stuffing, bot attacks, session hijacking, brute force attacks, and other password compromises lead to the proliferation of cybersecurity attacks. Digital applications need authentication and user management.”

With less capital and economic uncertainty, starting a business is difficult. Descope’s private beta and Markovich’s refusal to discuss revenue or customer base don’t help either.

Markovich claims that Descope is “well-positioned” to weather a tech slowdown, and perhaps uniquely positioned given that difficult economies often lead to increased fraud and cyberattacks.

Markovich said the Descope team has seasoned startup operators who have built companies in both bull and bear markets. “They have experience allocating capital to initiatives that move the needle for business in a sustainable, customer-centric, and efficient manner.”

That remains to be seen.