Magic Labs (formerly Fortmatic), a decentralised identity startup that provides passwordless login solutions, has raised $27m in a Series A funding round.
The round was led by London-based venture capital firm Northzone, with participation from new and existing investors, including Tiger Global, Volt Capital, Digital Currency Group, CoinFund, and Placeholder. More than 80 angel investors also backed the round, including Reddit co-founder Alexis Ohanian, Github CTO Jason Warner, former Coinbase CTO Balaji Srinivasan, Dapper Labs CEO Roham Gharegozlou, and AngelList co-founder Naval Ravikant, among others.
As part of the deal, Northzone partner Wendy Xiao Schadeck has also joined Magic’s board.
The Series A round, which comes just over a year after Magic launched from stealth, brings Magic’s total funding to date to $31m.
With fresh capital at hand, the San Francisco-based startup plans to scale its platform and expand its team. Magic’s current headcount is over 30, and the firm is looking to hire at least 30 more people across product, engineering, design, marketing, and finance functions.
As for scaling Magic’s platform, the firm aims to get more developers building on Magic. Currently, thousands of developers utilise Magic to onboard users sans passwords.
Launched last year, the Magic platform provides developers with a plug-and-play software development kit (SDK) that enables various passwordless login methods for users, including Magic links, social login, and WebAuthn. That makes users safer because their passwords can no longer be stolen in data breaches, which can get worse if the user reuses passwords elsewhere such as on a bank account.
Instead of passwords, Magic uses public/private cryptographic key pairs created on the Ethereum blockchain. The public cryptographic key acts as an identifier, proving to the website whom the users are, and the private key is a secret that only the users can access. Instead of revealing their secret, the way one might send passwords, users instead prove that they know the private key by signing a piece of data with it.
Magic supports various blockchains, including Binance Smart Chain, Solana, Polkadot, and Polygon. Support for more blockchains is to be added, including Bitcoin.
As of its business model, Magic charges developers a fee per login similar to cloud computing platform Amazon Web Services.
Magic co-founder and Chief Executive Sean Li said that since launching in 2019, Magic has signed up thousands of developers and powers hundreds of applications in production. “We’re securing millions of user identities, growing rapidly week over week,” he said. Magic’s customers are both crypto and non-crypto, including Polymarket, Showtime, Nifty’s, Async Art, virtual event platform Brella, and software firm Uservoice, said Li.
Schadeck added, “We couldn’t be more excited to support Sean and the Magic team as they redefine authentication for the internet from the bottom up, solving a core pain point for developers, users, and companies.
“It was clear to us that they’re absolutely loved by their customers because the team is so obsessed with serving every single part of the developer journey across several communities. What’s potentially even more exciting is what they will be able to do to empower users and decentralize the identity layer of the web.”
Copyright © 2018 RegTech Analyst
