The Hustle

The security startup that sold 1m 2FA dongles to Google

Yubico created a dongle to fix the 2FA process. Now, 9 of the world’s 10 biggest tech companies use it.


January 7, 2021

“What if [insert Big Tech firm] competes against us?” It’s a question every startup asks itself.

There’s the flip side too, though: What if a Big Tech firm becomes your startup’s biggest customer?

This is exactly the case for Yubico, the hardware maker of the popular

security dongle called Yubikey.

Yubico was founded in 2007 in Sweden…

… and for years was an “obscure security firm” with only 5 full-time employees, according to The Information.

The company was trying to solve a problem with the ubiquitous two-factor authentication (2FA) process:

  1. First factor: username + password
  2. Second factor: one-time password via text, email, or authenticator

There are actually a number of ways to bypass 2FA, from phishing to intercepting tokens. Yubikey partially solves the problem by requiring a user to plug its dongle into a USB port as another layer of security.

Yubico’s first big client, Google (which has bought 1m+ dongles)

While the ~$45 dongle is not a silver bullet (it could not have prevented the SolarWinds hack), organizations are snapping them up.

Today, 9 out of 10 of the biggest tech companies as well as world leaders (e.g., Angela Merkel) use Yubikey. Banks have rolled them out to high net-worth individuals (not me) and it could be coming to your office next.

With 300 employees now, Yubico expects revenue to rise 70% this year (from $200m in 2020) and may be prepping another key startup question: “When’s the IPO?”

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