1Password has been around for 14 years, and the founders grew the company the old-fashioned way -- without a dime of venture capital. But when it decided to take venture help, it went all in. Today, the company announced a $200 million Series A from Accel, the largest single investment in the firm's 35-year history.
Dave Teare says he and his co-founder Roustem Karimov were resolving a major pain point for users around password creation and management when they launched in 2005, and that the Toronto company has been profitable from day one. That's not something you hear from startups all that often.
Today, Jeff Shiner is CEO. He helped grow the company from 20 employees when he came on board in 2012 to 174 today. He says that as he helped foster this growth, he saw a tremendous market opportunity in front of him. That's when he decided to finally take the plunge into venture investing.
"We've got the sophisticated business tooling that we built over the last five years, so that we can really go out there and just double and triple down on what we've been doing, and drive that much faster and further into the market, and again that market is honestly from consumers all the way up to enterprises," Shiner explained.
While he is confident in his company's ability to build a product people want and its support for its customers, it needs help with other aspects of the business to grow faster and take advantage of the market potential. "We have far less experience with things like go-to-market programs, with sales, marketing and finance teams -- and things like that. And we need to grow, and grow aggressively, which is not just hiring people, but also getting the right partners, finding the right leaders to help us with that growth," he said.
Accel has a history of investing in mature companies that haven't taken funding before, so what it's doing with this round isn't all that unusual for the firm. Arun Mathew, a partner at Accel, says he doesn't come across companies like 1Password all that often. "Like Atlassian and Qualtrics, the 1Password team impressed us by building a business that’s not only scaling extremely quickly but also has been profitable since day one -- and that’s why today we’re making the biggest single investment in Accel’s 35-year history," Mathew said in a statement.
The founders actually stumbled onto the idea of 1Password in 2005. They were running a web development consultancy when they decided to resolve a long-standing problem of logging into multiple websites, a particularly acute issue given their day jobs.
They decided to build a tool to help, and when they put it out in the world, they found lots of other people had the same problem. They ended up closing the web consultancy to build 1Password, and the rest, as they say, is history.