# Stytch Financial Model

API-first passwordless authentication infrastructure for developers building modern applications

- Canonical: https://finamodel.com/startups/stytch
- Excel download: https://finamodel.com/startup-models/stytch.xlsx
- Category: Dev Tools
- Model type: SaaS ARR / Valuation
- Funding round: Series B
- Funding: $90M
- Founded: 2021
- Geography: Not stated; product references WhatsApp passcodes as "a global solution" suggesting international scope [DECK slide 12]
- Customer: B2B

## About the company

Stytch provides drop-in and API-driven passwordless authentication primitives including email magic links, SMS and WhatsApp passcodes, session management, OAuth, WebAuthn, embeddable links, and authenticator-app codes. Developers can use prebuilt UI flows or REST APIs and SDKs across web, iOS, Android, React Native, Node, Python, Ruby, and Go.

The research supports a consumption model that scales with authentication API calls and customer monthly active users, with enterprise contracts possible for larger deployments. It does not disclose pricing, customers, revenue, or usage. Its product value is reducing the engineering and abandonment costs associated with passwords and password resets.

The model should forecast developer accounts, production apps, authenticated MAUs, events, price, enterprise contracts, identity-infrastructure cost, expansion, churn, and NRR. Scenarios should separate self-serve API adoption from larger customers needing advanced authentication features, compliance, support, and account-management workflows.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

Stytch provides a suite of drop-in and API-driven authentication primitives that replace passwords:
- Email magic links (desktop + mobile; removes "forgot password" flow)
- SMS one-time passcodes (OTP), WhatsApp passcodes, email passcodes
- Session management (single-point authorization)
- OAuth / OpenID logins
- WebAuthn (biometrics, hardware keys)
- Embeddable magic links (weave auth into any user interaction)
- Authenticator app passcodes

Integration options: prebuilt UI flows OR direct REST API; SDKs for Web (JS/React), iOS, Android, React Native; client libraries for Node, Python, Ruby, Go

Roadmap (2022): native biometrics, Login with Ethereum, push authentication, PIN creation

## Traction & metrics

Industry stats cited (not Stytch-specific traction):
- Engineers spend 8+ weeks/year on auth maintenance on average
- 21% of users forget passwords within 2 weeks; 78% forget one in past 90 days
- 1/3 of online purchases abandoned due to forgotten passwords
- 75% of users who initiate password reset abandon the interaction
- IT teams spend 5 hours/week on password issues
- A password is reused 13x on average
- 92% of businesses believe passwordless is the future

## Competition / moat

Not explicitly addressed. Positioning implied through product breadth (9 auth methods live + 4 on roadmap) and flexible integration model (prebuilt UI + raw API). Comparable vendors (Auth0, Okta, Firebase Auth) are not named. Moat framing is developer experience and passwordless-first architecture.

## Team & funding ask / use of funds

Team:
- Reed McGinley-Stempel, Co-Founder / CEO - previously Plaid, Bain & Company
- Julianna Lamb, Co-Founder / CTO - previously Plaid, Very Good Security, Strava

Investors (logos shown, no amounts): Benchmark, Thrive Capital, Index Ventures, Coatue

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## Recommended financial model

- **Archetype + why:** Usage-based / consumption SaaS ARR model. Stytch sells auth API calls and monthly active user (MAU) authentication volume to developer teams - identical billing mechanics to Auth0, Clerk, and WorkOS. Revenue scales with customer MAU growth, making a bottoms-up MAU-to-revenue driver tree the right structure. No evidence of seat-based or flat-fee pricing, so per-MAU tiers are the billing unit.

- **Forecast horizon & granularity:** 5-year annual model (Y1–Y5), with Y1 broken into monthly for cash management. Given early stage (Feb 2022, no traction shown), Y1–Y2 are build-out years and Y3–Y5 are growth curve years.

- **Key drivers & assumptions:**

  *Customer acquisition*
  - Number of customer accounts (companies) at period start
  - New logo adds per month
  - Churn rate (logo)

  *Volume / consumption*
  - Average MAUs authenticated per customer account
  - MAU growth per customer per year

  *Pricing*
  - Revenue per MAU (blended)
  - Free tier MAU threshold

  *Unit economics*
  - Gross margin
  - SMS/OTP delivery cost per authentication event
  - S&M as % of revenue
  - R&D as % of revenue
  - G&A

  *Headcount*
  - Engineering, sales, customer success hires by year

- **Scenarios (Base / Bull / Bear - which variables flex):**
  - Bear: slower new logo adds, lower MAU growth per customer, higher SMS cost
  - Base: PLG flywheel works, mid-market expansion, gross margin improves as SMS mix shifts to email/magic link
  - Bull: enterprise deals close earlier, blended MAU price holds, MAU per customer ramps faster

- **Required sheets / outputs:**
  1. Assumptions - all drivers with toggle for scenario
  2. Customer model - logo count, MAU by cohort, blended revenue
  3. P&L - Revenue, COGS (infra + delivery), Gross Profit, OpEx (S&M / R&D / G&A), EBITDA
  4. Cash flow & runway - burn rate, cash balance, implied raise timing
  5. Summary / KPIs - ARR, NRR, CAC, LTV, LTV/CAC, gross margin, runway

## Frequently asked questions

### Is the Stytch financial model free?

Yes. The Stytch model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.