MSP Today Expert Feature
February 25, 2013

$8.2 Million Series A Financing Closed by Stormpath

Stormpath, the first easy, secure user management and authentication service, is now formally out of its beta period and has closed $8.2 million in Series A financing. The funding round was led by Pelion Ventures, New Enterprise Associates and Flybridge Capital Partners

Stormpath was founded in 2011 to solve a key security issue for cloud-based companies. There was always a problem of authenticating and managing a large user base over cloud. Chief technical officer, Les Hazlewood and chief executive officer, Alex Salazar designed a way for developers to safely store their user data. With the help of Stormpath’s services a simple API integration provided the users best-in-class security while keeping development and operating costs low. Common job functions were taken care of by Stormpath thus enabling the developers to use their time more productively. The user management service is free for developers and premium features are available on subscription.

“Stormpath has built an impressive team and is at the heart of cloud infrastructure and developer-driven IT,” said Peter Sonsini, general partner at NEA. “We’re excited by the wave of developer services, and because user management is necessary for every application, every developer can use the service.”

According to a study by Forrester Research (News - Alert), the Identity Management market will be worth $12 billion in 2014. As the cloud adoption is projected to grow at a phenomenal 24 percent annually, Stormpath is targeting this fast growing market which is at the intersection of identity management and cloud development.

“We’re entering the age of plug-and-play architecture, where developers can easily and securely offload commodity infrastructure – like user management, billing, and logging – to API services,” said Alex Salazar, chief executive officer of Stormpath. “Developers don’t want to waste time rebuilding user login for every new app – it’s critical to the business, but not core to their product, and getting it wrong is expensive. Sony got caught on a totally preventable mistake, and it cost them $171 million.”

“Just as developers can use APIs to automate their payment processing with PayPal or messaging with SendGrid and Twilio (News - Alert), they can securely manage and authenticate users with Stormpath,” said Les Hazlewood. “The Stormpath API was painstakingly built from the ground up to cater to developers and simplify their lives. The more they can offload to APIs like Stormpath, the faster they can build their applications.”

Services like PublicAlerter use Stormpath for safety and adopting its user management backend helps the services arrive in market quickly.

A seed round from Flybridge and NEA and an angel round led by Andy Rachleff preceded the Series A round. Andy Rachleff is the chief executive officer of WealthFront, who co-founded Benchmark Capital.

Edited by Rich Steeves