Passwordless authentication helps combat phishing and data breaches at scale — and it's gaining momentum. This could threaten the enterprise password manager market.
Last week, Google announced it would allow personal account users to log in with passkeys — a passwordless authentication method.
Passwordless authentication replaces static credentials with other secure methods, like biometrics, to allow users to access their accounts.
This comes a year after Google, Apple, and Microsoft expanded their support for a common passwordless sign-in standard developed by the Fast IDentity Online (FIDO) Alliance and the World Wide Web Consortium.
Given that use of stolen or compromised credentials remains the most common cause of company data breaches, according to IBM, passwordless authentication stands as a solution capable of protecting enterprises from these costly events. In fact, globally, a data breach reportedly costs over $4M on average.
These solutions also have the potential to reduce costs for enterprise IT departments, as password resets make up half of help desk expenses, per the World Economic Forum.
Businesses like Aon and Carmax have already deployed passwordless authentication for their workforces. Now, Google’s move will likely accelerate greater adoption of passwordless authentication for both personal and enterprise accounts.
In this brief, we use CB Insights data to analyze the market for passwordless authentication tools. We look at the following data points:
- Total funding
- Top-funded startups
- Valuations
- Execution, Strength, and Positioning (ESP) matrix
Total funding & top-funded startups
Transmit Security ($583M), Beyond Identity ($205M) and HYPR ($92M) are the 3 most well-funded passwordless authentication startups (by all-time total equity funding).
Since 2019, the space as a whole has drawn $1.1B in equity funding — and Transmit Security, Beyond Identity, and Hypr account for 77% of that total.
Explore and compare these key passwordless authentication vendors and others in our Execution, Strength, and Positioning (ESP) Matrix.
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