1Password Prepares for Potential IPO in 2025
Toronto-based password management company 1Password is preparing to go public, with plans for a potential initial public offering (IPO) as early as 2025. The company, officially known as AgileBits Inc., has begun interviewing banks to lay the groundwork for the IPO, although final decisions regarding timing and underwriter selection remain pending.
Founded in 2005, 1Password initially operated without external funding for 14 years before its first venture capital raise in 2019. The company has since grown into one of the leaders in password management, serving 100,000 enterprise customers and millions of individual users, with a reported annual recurring revenue exceeding $150 million in 2021. It competes in the password management space alongside industry players like LastPass and Dashlane Inc.
1Password was most recently valued at $6.8 billion following a 2022 funding round, having raised $950 million to date from major investors such as Accel, Iconiq, and Tiger Global. The company has also attracted investments from high-profile celebrities, including Justin Timberlake, Scarlett Johansson, Pharrell Williams, and Matthew McConaughey.
The leadership team, led by co-CEOs Jeff Shiner and newly appointed David Faugno, is focused on positioning 1Password for future growth. Faugno, a former venture partner at Accel and CFO at Qualtrics, emphasized that while discussions with banks and institutional investors are ongoing, no concrete decisions have been made about the IPO.
Key Takeaways
- Valuation: 1Password was valued at $6.8 billion in 2022 after a successful funding round.
- Investors: It has raised $950 million from institutional investors like Accel, Iconiq, and Tiger Global, along with celebrity backers.
- Revenue Growth: The company achieved annual recurring revenue exceeding $150 million as of 2021, reflecting strong business traction.
- Market Position: Competing with LastPass and Dashlane, 1Password serves 100,000 enterprise clients and millions of end-users globally.
Deep Analysis
1Password’s potential IPO marks a significant turning point in the company’s evolution. Having operated privately for the majority of its history, the firm’s decision to go public reflects confidence in its business model and market positioning. The shift to remote work and growing cybersecurity concerns have driven demand for secure, user-friendly password management solutions, allowing 1Password to achieve remarkable growth.
The appointment of David Faugno as co-CEO appears strategically timed, given his experience in scaling tech companies and navigating public markets. With major investors like Accel and Iconiq backing its journey, 1Password is poised to attract significant interest during its IPO, especially from those who view cybersecurity as a growth sector.
Its ability to leverage high-profile celebrity endorsements may further bolster its brand visibility ahead of the public offering. However, the company will also face challenges, including increasing competition in the password management space and investor scrutiny regarding profitability and long-term scalability.
Did You Know?
- Unique Origins: Unlike many startups, 1Password operated entirely without venture capital for 14 years before raising its first funding round in 2019.
- Celebrity Connections: Hollywood stars and musicians like Justin Timberlake and Scarlett Johansson are among its investors, adding a splash of glamour to its otherwise tech-centric profile.
- Record-breaking Funding: In 2023, the company raised a $620 million Series C round at a $6.2 billion valuation, one of the largest in its sector.
- Broad Reach: Beyond individual users, 1Password caters to major corporations with a focus on securing sensitive enterprise data, making it a critical tool in today’s cybersecurity landscape.
As 1Password progresses toward a potential IPO, its journey will be closely watched by investors, competitors, and the tech industry at large. Whether it can sustain its growth trajectory and meet public market expectations remains to be seen, but its foundations appear strong.