Decentralized identity authentication platform Magic raises $27M

Roughly 80% of information breaches are due to compromised passwords, according to reports, a figure made all the more sobering when you look at that cybercrime is estimated to expense the worldwide economy $2.9 million every minute in 2020. Throw into the mix the $1 million the typical big firm reportedly spends on password resets annually, and it is effortless to have an understanding of the broad market push toward option user authentication mechanisms.

In the previous seven months alone, we’ve seen gargantuan sums of money fly into providers tackling the “password problem.” Biometric authentication platform Transmit Security raised $543 million at a hefty $2.3 billion valuation passwordless tech firm Beyond Identity locked down $75 million in funding Hypr secured $35 million and Stytch nabbed $30 million. Elsewhere, two titans from the identity and access management (IAM) sphere joined forces when Okta acquired Auth0 for a whopping $6.5 billion.

Against this backdrop, Magic today announced it has raised $27 million in a series A round of funding to additional commercialize its blockchain-powered identity authentication platform. The round, which was led by Northzone, featured a slew of higher-profile VC and angel investors, such as Tiger Global, Reddit cofounder Alexis Ohanian , and GitHub CTO Jason Warner.

Decentralized

The firm launched in 2018 as Fortmatic, and its founders involve CEO and former Docker item lead Sean Li former Yelp computer software engineer Arthur Jen and Jaemin Jin, a former computer software engineer at Apple, Amazon, and Uber. The San Francisco-based firm rebranded as Magic last May as it exited stealth with $4 million in seed funding. In the 14 months considering that, Magic claims it has grown its developer user base tenfold.

So what specifically is Magic, and how is it striving to differentiate itself?

In a nutshell, Magic aims to build the infrastructure to kill password-centric authentication employing decentralized identity management. It’s in the end about enhancing safety, offered that centralized identity management can spell disaster in the occasion of a breach. A plethora of current examples highlight this, such as some higher-profile information breaches. A couple of months back, news emerged that an arsenal of private Facebook information was performing the rounds on-line, such as e mail addresses, phone numbers, and Facebook ID numbers.

“When a few big companies house secrets — e.g. passwords — in a centralized way, one breached company puts billions of passwords on the internet at risk,” Li told VentureBeat. “Specifically, tech platforms like Google and Facebook act as centralized, single points of failure with ‘too big to fail’-level risks.”

With a decentralized method, Magic “leverages key-based cryptography over passwords,” as Li puts it, with private keys secured and owned completely by the customers themselves.

“When users sign in with Magic authentication, no secrets are passed around, eliminating the chance for lost or stolen passwords,” Li mentioned. “With a few lines of code, developers can leverage elliptic curve cryptography and public-private key pairs to authenticate users into applications.”

Any firm or developer seeking to embed safe passwordless identity management and login functionality into their applications whilst bypassing infrastructure belonging to large tech can use Magic’s plug-and-play computer software development kit (SDK) to unlock a variety of authentication possibilities. This incorporates e mail, with customers provided a Slack-like encounter that permits them to merely click on a “magic link” that is sent to their e mail address.

The SDK also supports the Web Authentication (WebAuthn) common, which suggests Magic caters to biometrics or FIDO2 safety keys, and the SDK also supports common social logins. In the future, the firm is arranging to extend assistance to SMS, multi-aspect authentication, and SAML single sign-on.

In terms of pricing, Magic adopts a metered billing method that begins at about $.0085 per login and is capped at $.034 per month-to-month active user. If an application had 10,000 customers, every logging in when per month, that would expense no more than $85. If every of these customers logs in twice a month, that would be $170, and so on, via the initially 4 logins per user every month. For more than 4 logins, Magic does not charge something added.

Magic’s shoppers involve item feedback platform UserVoice AI-powered copywriting platform Copy.AI and information and facts markets platform Polymarket. But the challenge Magic is in the end attempting to resolve is not restricted to any unique firm form or size — each and every firm is a computer software firm these days, just after all, and each and every firm should really be safeguarding its users’ private information. But performing so is usually less complicated mentioned than completed, especially in a world seemingly addicted to passwords.

“Authentication is complex,” Li mentioned. “The beauty of Magic is that we abstract away all of the complexities. With Magic, enterprises get peace of mind with secure, extensible passwordless authentication that’s built to scale — all with a few lines of code.”

Originally appeared on: TheSpuzz