Notable VCs from Accel Partners to Sequoia Capital to Foundation Capital have backed startups providing cloud-based identity & access management solutions. Deal and funding growth to the space have taken off since 2011.
As enterprise organizations rapidly adopt cloud-based applications, IT administrators are shifting from on-premise tools to identify and authenticate their users to those built securely in the cloud. And venture capital investors are betting that cloud-based identity management startups can transform how companies manage their access to data stored by services like Salesforce or Google Apps.
Over the past four quarters, companies providing cloud-based identity and access management solutions have taken in $170M across 24 deals. The largest chunk of that funding has gone to late-stage rounds to larger, more mature players including Okta, which raised a $27M Series D financing from notable investors including Sequoia Capital and Greylock Partners, and rumored IPO candidate Ping Identity, which took $44M in July. As shown in the chart below, both funding and deal activity in the market have jumped over the past two years.
While later-stage rounds are driving funding in the cloud identity management space, over 1/2 of the deals in past eight quarters have come at the Seed or Series A stage. Mid-stage deal activity (Series B & Series C) took nearly 1/3 of cloud identity management deals, including Accel and Foundation Capital-backed ForgeRock, which recently struck a partnership to help launch Salesforce.com’s new identity management service, Salesforce Identity.