Ryan Reynolds-Backed 1Password Hits $400M ARR

Ryan Reynolds (L), Scarlett Johansson (C), and Matthew McConaughy

Reuters

Cybersecurity firm 1Password, backed by celebrity investors including Ryan Reynolds, Matthew McConaughey, and Scarlett Johansson, has announced it has surpassed $400 million in annual recurring revenue (ARR), marking a significant milestone for the Toronto-based company.

“We believe we’re at a pretty significant inflection point in our journey,” CEO David Faugno told CNBC, highlighting the company’s readiness to capitalize on the evolving threat landscape. “We’re set up for this next wave of disruption, which I think is an even bigger opportunity for us.”

Faugno projects that 1Password will exceed $1 billion in ARR within the next few years, driven by the increasing sophistication of cyber threats linked to advancements in artificial intelligence and the resultant need for more robust digital protection measures. This growth trajectory underscores the critical role of password management and security solutions in the current digital ecosystem.

This announcement follows 1Password’s previous disclosure in 2023 when it revealed that it had exceeded $250 million in ARR, fueled by rapid B2B (business-to-business) growth. The company’s success reflects a broader trend in the cybersecurity market, where organizations are increasingly prioritizing advanced tools and strategies to safeguard their data and infrastructure.

The rise of AI has indeed accelerated the demand for enhanced cybersecurity solutions, particularly those capable of countering increasingly sophisticated cyberattacks. This trend is reflected in recent large-scale acquisitions, such as Palo Alto Networks’ significant investments, and the anticipation surrounding potential IPOs from companies like Netskope, further underscoring investor confidence in the sector. The cybersecurity landscape is rapidly evolving, with businesses now facing a barrage of threats ranging from AI-powered phishing scams to automated vulnerability exploitation. This new reality necessitates a proactive approach to security, where robust password management and multi-factor authentication become essential components of a comprehensive defense strategy.

Founded in 2005, 1Password boasts an impressive client roster, including IBM, Perplexity AI, Salesforce, and the Golden State Warriors. The company also has a multiyear partnership with Formula 1 team Oracle Red Bull Racing. 1Password secures over 1.3 billion human and machine credentials and works with 180,000 business customers.

In a strategic move to bolster its leadership team, 1Password announced the appointment of Michael Hughes, formerly of ChargePoint and Barracuda Networks, and John Torrey, formerly of Qualtrics and SAP, as chief business officer. This is expected to strengthen the company’s strategy to attract and retain larger enterprise clients.

1Password’s C-suite has undergone a significant transformation over the past year. Jeff Shiner, who led the company for 13 years, transitioned to executive chair of the board in July. David Faugno, who was promoted to co-CEO prior to that, assumed the role of sole CEO at that time. Faugno initially joined 1Password as president and operating chief in 2023.

To date, 1Password has raised approximately $950 million and holds a valuation of $6.8 billion, according to Pitchbook data. Notable investors also include actor Justin Timberlake, comedian Trevor Noah, CrowdStrike CEO George Kurtz, and investment firm Iconiq.

Looking ahead, Faugno indicated that 1Password is considering a potential IPO in 2026 or 2027, but emphasized that the company is not “rushing out to go public.” He said 1Password remains focused on providing the best tools for its customers. “We control our own destiny,” he said. “From a profitability perspective, we have investors that are playing the long game with us.” 1Password’s path to a potential IPO reflects a cautious yet confident approach, prioritizing sustained growth and product innovation over immediate public market access. The company’s strong ARR, coupled with its expansion into enterprise-level security solutions, positions it as a key player in the evolving cybersecurity landscape.