UPDATED 07:59 EDT / DECEMBER 17 2014

OneLogin nets $25M to build identity management for the cloud era

finger on a keyboardOneLogin Inc. caught the wave of investor interest in cloud security startups on Tuesday, securing a $25 million financing round from Scale Venture Partners and existing backers to better address the rising demand for managed identify management services. The four-year-old startup is already a leader in the space, boasting over 1,000 corporate customers across more than 100 countries.

Much of the appeal behind OneLogin lies in the relative simplicity of its namesake platform, which provides information governance capabilities, which were previously only available with expensive on-premise software suites, across 4,000 cloud services. The startup allows organizations to sync their user directories across all the supported applications, sparing employees the hassle of juggling multiple accounts while persevering the IT organization’s centralized control over authorizations and passwords.

OneLogin not only works with Active Directory – the most popular platform for managing access to data and applications in the enterprise – but also cloud-based alternatives such as Google Apps and Workday, Inc.’s popular human resources service. That makes it attractive to small- and medium-sized businesses (SMBs) as well as big corporations. OneLogin has an entry-level edition specifically aimed at that market.

Plans range from free single sign-on functionality for up to eight apps and integration with one user directory of the customer’s choice to the full-featured enterprise option, which includes the ability to create, update and suspend accounts from a centralized console. For $8 per seat per month, organizations can also define custom fields and maps that determine how workers interact with a particular service.

It’s that deep support for cloud-based application that enables OneLogin to set itself apart from traditional identify management providers, which have focused primarily on software kept within the four walls of the organization. But there are plenty of startups touting similar value propositions. The competition includes a mix of niche identity management firms such as Okta Inc. and Ping Identity Corp. as well as broader-focused contenders like the recently-funded CipherCloud Inc., which secures data outside the firewall.

The new funding should help put OneLogin in a better position against its rivals. The startup intends to spend the the capital, which brings its total raised to over $42 million, on expanding engineering, sales and marketing operations. Rory O’Driscoll of Scale Venture Partners is joining the board as part of the investment.

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