Magic Labs, an IT startup aiming to develop decentralized identity authentication solutions, has raised $27 million in a Series A funding round.
The round was led by venture capital firm Northzone and counted with the participation of other firms like Tiger Global, Volt Capital, Digital Currency Group, and CoinFund. Influent angel investors like Reddit co-founder Alexis Ohanian, and GitHub CTO Jason Warner also decided to back the company.
The total funding raised b the startup since its founding in 2018 is now $31 million, with the San Francisco-based startup constantly growing its developer user base more than 10 times ever since its seed round back in May 2020.
With decentralized solutions gaining notoriety over the past years as users around the world become warier of their privacy and data silos, the use of decentralized identity management has become increasingly important to increase security. Magic Labs CEO and Founder Sean Li referred to this trend by stating:
“When a few big companies house secrets — e.g., passwords — in a centralized way, one breached company puts billions of passwords on the internet at risk. Specifically, tech platforms like Google and Facebook act as centralized, single points of failure with ‘too big to fail’-level risks. When users sign in with Magic authentication, no secrets are passed around, eliminating the chance for lost or stolen passwords”
The startup aims to create the next “passport of the internet” to fix a model that it has deemed “fundamentally broken” by starting where the current network of platforms starts: with developers.
The platform allows developers to harvest the benefits of elliptic curve cryptography and public-private key pairs to authenticate users with a few lines of code, increasing the security and reliance of their platform without affecting the user experience.
At this time, the IT startup is using the funds to increase the size of its engineering, product, research, and marketing teams and continue developing its platform. By using the latest innovations of blockchain technology, the IT startup is tapping the potential of an industry that has grown by more than 56% over the past year and is expected to reach $69.04 billion by 2027.