With a change in leadership, 1Password is preparing for the age of artificial intelligence and a potential IPO.
Cybersecurity software company based in Toronto. 1Password reported that its annual recurring revenue (ARR) exceeded US$400 million this year, up from $250 million in 2023. The company says it was able to do this while maintaining positive free cash flow.
The 1,400-person Canadian technology firm currently serves more than 180,000 businesses, including nearly a third of the Fortune 100, provides credentials for more than 1.3 billion people and computers, and supports more than one million developers.
“We have reached the scale and profitability where we could go public today.”
David Faugno, 1Password
In an interview with BetaKit, 1Password CEO David Faugno said the company's current size and market position is a “great starting point” for “bringing that level of trust” into the age of artificial intelligence (AI). 1Password still has some work to do before considering an initial public offering, he said.
“We've reached the scale and profitability that we could go public today—we know that,” Faugno said. “What we're focused on is making sure we deliver those transitions to our customers. We have a very ambitious roadmap for our AI product suite, and we have a whole new team coming together to take advantage of that.”
Faugno argues that public market investors want a “level of predictability” from a business that is difficult to provide given how dynamic the AI market is at the moment. The CEO said 1Password wants to see that predictability, as well as evidence of repeatability, before it goes public.
“I can't tell you when that will happen,” Faugno said, but noted that 1Password is taking steps to ensure it has the right team, processes and vision to make that leap when the time comes.
That includes adding what Faugno said were some “stage-worthy people” to 1Password's executive team, including new president Michael Hughes, who previously held senior positions at ChargePoint and Barracuda Networks, and chief business officer John Torrey, who previously held senior positions at Qualtrics and SAP.
CONNECTED: Senior executives Pedro Canauati and Julian Teixeira are leaving 1Password
Hughes will oversee sales, customer experience and revenue management, while Torrey will lead strategic expansion through mergers and acquisitions, partnerships and ecosystem development.
They mark the latest in a series of leadership changes 1Password has made over the past year. Since Fauño became co-CEO The company saw longtime CEO Jeff Scheiner late last year. transition to executive chair and CTO Pedro Canauati and CRO Julian Teixeira go out of business.
During this time, 1Password named Greg Henry CFO, promoted Ginny De Guzman to COO, hired Abe Ankuma as chief product officer, promoted Nancy Wang to senior vice president of engineering, and promoted Jacob DePriest to chief information security officer and chief information technology officer.
“We feel like … we have a team that we know we can move with for the foreseeable future,” including the public markets, Faugno said.
Founded in 2005 and formally known as AgileBits, 1Password is one of Canada's most valuable technology companies. It sells identity security and access management software that helps individuals and enterprise clients such as Associated Press, Canva, Harvard University, Hugging Face, IBM, Midjourney, Salesforce, Slack and Stripe securely sign in to apps and websites.
In recent years, 1Password has evolved from a consumer-focused password manager to wider digital security platform for businesses that now account for more than 75 percent of total revenue. Faugno expects this share to continue to grow.
CONNECTED: 1Password Expands Advanced Access Control Platform with AI-Powered Agent Security
Faugno said 1Password sees a “huge opportunity” in helping enterprises navigate security issues related to artificial intelligence and is leaning toward it “aggressively.”
This work included adding AI agent security to its advanced access management platform to help companies and developers manage AI agents more securely, and collaborate with AI web browser developers such as Confusion And Browser database.
As 1Password continues to implement its artificial intelligence strategy, Faugno said the firm now has a lot of money in the bank and an investor base that is interested in “playing the long game.”
“They're not looking for liquidity – they want us to build a huge business, and that's a very, very luxurious position to be in,” he said. “Not many companies our size can say that.”
The co-founders and longtime employees of 1Password recently sold some shares as part of US$100 million a secondary deal that may have helped alleviate any internal pressure the company felt to go public sooner rather than later.
Faugno expects 1Password to eclipse $500 million in ARR in the “not too distant future” as its ARR reaches $1 billion “and beyond.”
Image courtesy of 1Password.
