OTPless, a customer identity and access management startup, has raised $3.5 million in its pre-series A funding round. The investment was led by Sidbi, with participation from Venture Highway, FJ Labs, and Piper Serica. This funding milestone for the Surat, Gujarat-based startup brings OTPless’s total raised to $6.5 million, which will be used to expand its global presence and extend its services beyond authentication to include authorization.
Led by Bhavik Koladiya, Satyam Nathani, and Tanmay Sagar, a founding team of fintech unicorn BharatPe, OTPless is transforming the authentication landscape by eliminating the need for One-Time Passwords (OTPs). Instead, users can sign up and sign in on websites and apps via WhatsApp and other methods, offering a seamless and secure authentication experience. This approach not only simplifies the process for users but also enhances security, addressing common concerns with OTP-based authentication.
In just one year, OTPless has become a game-changer in the identity and access management (IAM) space. The startup offers a comprehensive platform supporting various social sign-in methods, including Google, iMessage, Microsoft, GitHub, Slack, UPI, and modern protocols like Passkeys, Network Auth, Protected SMS, and Device Fingerprinting. Developers can easily integrate OTPless’s SDKs and APIs, going live within minutes using pre-built UIs or customizing from scratch. This flexibility has made OTPless a preferred choice for developers looking to implement robust authentication solutions quickly and efficiently.
OTPless’s platform also includes silent network authentication in partnership with telecom operators, further enhancing security and user experience. More than 5,000 companies and 20,000 developers worldwide use OTPless to authenticate over 30 million users. These companies benefit from higher conversion rates of up to 98%, thanks to the streamlined rule-based smart authentication process that reduces friction for end-users. Additionally, OTPless provides robust security through device-bound and biometric authentication, ensuring users remain protected against unauthorized access.
Satyam Nathani, Co-founder and product lead at OTPless, shared, “In addition to it being complicated, it’s resource-intensive and error-prone to build in-house. The core building blocks for authentication had significant security and conversion issues. The web has improved in many ways, but authentication is still stuck in the 1990s.”
Global Expansion and Competitive Edge
“Our vision is to revolutionize user authentication by making it simpler, faster, and more secure,” said Bhavik Koladiya. “This funding will help us scale our operations and enhance our technology to meet the growing global demand. We are committed to providing the best possible experience for our users and partners, and this investment will enable us to continue innovating and expanding our capabilities.”
OTPless aims to help organizations eliminate OTPs, reducing signup/signin churn and checkout abandonment while providing superior security. According to OTPless, weak OTPs account for more than 80% of all account breaches, and the average help desk labor cost to reset a single password is over $70. OTPless’s web-based authenticator, which handles more than 9,000 authentication requests per second, can reduce account resets by 96% and reduce customer authentication time from 1 minute to 2 seconds.
“OTPs are the leading cause of security breaches and cause friction throughout a user journey, leading to churn and a negative experience,” said Satyam Nathani. “Authentication and user management are critical parts of any digital application.”
Sidbi’s Strategic Investment
Sidbi Ventures, the venture arm of the Small Industries Development Bank of India, led the investment round. Debraj Banerjee, Senior Fund Manager at SVCL, said, “Sidbi Venture Capital Ltd is proud to support OTPless in its mission to revolutionize authentication. Their innovative approach aligns with our commitment to fostering technological advancements that enhance security and user experience.”
Regulatory Support for Innovative Authentication
RBI Governor Shaktikanta Das recently emphasized the Reserve Bank’s commitment to enhancing digital payment security, highlighting the need for additional authentication factors (AFA). While SMS-based OTPs have been the standard, new technologies offer more secure alternatives. The RBI’s principle-based framework aims to support these innovations, facilitating their adoption for digital security.
Market Potential and Future Outlook
With a dedicated team of 50 members, OTPless plans to use the new funds to expand its global presence and challenge established players such as Auth0, Clerk, Stytch, Descope, and Transmit Security. The global customer identity and access management market, valued at $25 billion, is expected to grow at a compound annual growth rate (CAGR) of 20% over the next few years.
Expanding Capabilities and Product Offerings
OTPless is continuously innovating to enhance its platform and expand its capabilities. The startup plans to introduce new features and integrations to simplify the authentication process further. These include additional social sign-in options, enhanced biometric authentication methods, passkeys, adaptive authentication, and advanced security features.
Commitment to Security and User Privacy
Security and user privacy are at the core of OTPless’s mission. The startup employs state-of-the-art encryption and security protocols to protect user identity and ensure secure and reliable authentication processes.
Building a Strong Community of Developers
OTPless recognizes the importance of fostering a strong developer community. The startup offers extensive documentation, tutorials, and support to help developers get started with its SDKs and APIs. OTPless hosts regular webinars, workshops, and hackathons to engage with the developer community and gather product feedback.
Strategic Partnerships and Collaborations
OTPless is actively seeking strategic partnerships and collaborations to expand its reach and enhance its offerings. The startup is exploring opportunities to integrate its platform with leading technology providers, payment processors, and telecom operators to provide a seamless and comprehensive authentication solution.
As the digital landscape continues to evolve, the need for secure and user-friendly authentication solutions will grow. OTPless is poised to lead the charge in this space, with its innovative technology and commitment to delivering exceptional user experiences.
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