Two identity management startups join hallowed unicorn ranks in October

Two U.S.-based identity management startups were added to Crunchbase’s “Unicorn Board” just as other former cybersecurity unicorns have gone out of business. The addition is welcome news the recently challenged cybersecurity sector, which has been challenged recently by a tightening of the economy and macroeconomic forces.

The two firms bring the Unicorn Board list to nine making the October Crunchbase list for unicorn-status. Interestingly, none of the current Unicorn Board companies are Silicon Valley based.

As senior data editor Gené Teare noted last week for Crunchbase, the majority of those companies on its Unicorn Board received additional funding through extension rounds, with no increase in overall value.

Keyfactor and Prove Identity added to unicorn club

The two cybersecurity firms joining Crunchbase’s list of companies valued at or over $1 billion are New York-based smartphone identity authentication platform Prove Identity and Cleveland-based security firm Keyfactor.

In October, Prove announced a $40 million funding round led by MassMutual Ventures and Capital One Ventures, bringing its value to $1 billion. Keyfactor’s valuation jumped to $1.3 billion after receiving a minority investment from Sixth Street Group in October. 

The news of the two cybersecurity firms leading the charge of unicorns last month follows SYN Ventures closing a $75 million seed fund dedicated solely to cybersecurity startups. 

The investments and valuations were bright spots at a time when security companies announced layoffs, and at least one — IronNet, itself a former unicorn that was valued at $1.2 billion when it went public in 2021 — filed for bankruptcy in late September.

Also of note in Crunchbase’s article was the addition of Baichuan Intelligence, a China-based artificial intelligence (AI) company, which raised $300 million in Series A funding from Alibaba, Tencent and Xiaomi. 

A study released by The International Information System Security Certification Consortium (ICS2) in October found that cybersecurity professionals worldwide expected hiring to decrease for the first time since 2020, with AI emerging as a factor.