How Does 1password Make Money? Business Model of 1password

1Passw0rd is a popular software application that helps users secure passwords and manage them safely. With the help of this app, users can store, organize, and retrieve information about passwords easily. It is developed by Agile Bits Inc., a company based out of California. They offer a wide range of products including apps such as Tweet Deck, Evernote, and WordPress.

1Password operates on a SaaS business model where they charge for different subscription levels. They offer five subscription packages: one-person access, family, team starter pack, business, and enterprise.

It’s not hard to see why the freemium model is becoming increasingly popular for new products.

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About 1password

1Password is a password management service that has successfully adapted to the current situation. It operates within an already established market and therefore offers no new disruptive opportunities. However, within its own market, it provides a solution for managing passwords.

With 1Passw0rd, you can easily remember all your passwords and keep them safe and secure. It will create strong, unique passwords for every account and organize them into categories so they’re easy to access. Then, whenever you sign up for an app or website, it will automatically fill in the username and email address fields for you. Finally, it will magically disappear once you’ve entered your super-secret master passcode.

It offers the best user interface for managing passwords across all major platforms: Mac OS X, Windows PCs, iOS devices (iPhone, iPad), Android phones and tablets, and Apple Watches.

Business Model of 1password

Business Model of 1password

1Password is a freemium software product, specifically a password manager. It has several competitors including LastPass and Dashlane.

  • LastPass
  • Keeper Password Manager
  • RoboForm
  • KeePass
  • Dashlane Business
  • Bitwarden
  • Enpass
  • Kaspersky Password Manager


As a password manager, 1Password has helped many companies adjust to the COVID-2019 pandemic by helping them transition from an office environment to a remote one. As CEO Jeff Shrier told VentureBeat, “Business[es] — both large and small—were forced overnight to adopt a [remote] method of working.”

Before the pandemic began, many of these organizations had been accustomed to working from a central location. Suddenly, they had to support workers who were now working remotely on their own potentially insecure network. As a result of the remote-hybrid reset, a proliferation of SaaSSuite products to help keep people and groups productive came into the marketplace.

As organizations began adopting cloud services for their business applications, they started using them to manage their employees’ time off. They ended up having dozens of different systems to track employee leave requests.

With the rise of remote enterprises, companies are now more vulnerable to phishing and password breaches than ever before. Fortunately, 1Pass­word provides a lot of benefits for business owners across different sizes and types of organizations.

With so many people using smartphones and tablets for everything from banking to shopping to social networking, there’s no doubt that we’re living in a digital age where passwords aren’t enough anymore.

  • tight integration with Apple’s new biometric authentication feature called “Secure Enclave.”
  • Tight integration between facial recognition and Apple’s new iPhone XS Max and iPhone XR devices to allow for seamless unlocking of 1Password.
  • A new API that lets you use 1Password with security information and events management (SIEM) tools like Splunk


1Password has two main business units: one for the consumer market (1P) and another for the enterprise market (1T). Both business units were affected by the COVID- 19 pandemic, but the enterprise unit was hit far worse than the consumer unit.

As a result, companies struggling to adapt their business models to a remote workforce would be an ideal market for 1Password. This is especially true for companies that are having difficulty managing the security concerns that arise from the increased number of employees working remotely.

1Password has raised $20 million from several prominent venture capitalists including Shopify CEO Tobi Lütke, who was previously an investor at Dropbox.


Since 1Password isn’t really a physical store, it saves them on a number of costs. Like any software service, 1Password has to cover its technical staff, energy expenses, and maintain its equipment.

Besides offering an excellent product for free, 1Password offers additional services at a cost.

  • Hosting
  • Payroll
  • Sales

Plan for Profit

As a result of the current trend due to the COVID-19 pandemic, CEO Jeff Shiner knows that this shift to working from home has created a demand for software solutions.

As a result, phishing expeditions are rampant, and 1passwords is taking up most of the $1.4 billion market for online account access control solutions.

How Does 1password Make Money?

1Password makes money by selling subscriptions for its software. They offer five different subscription plans:

  • 1Password
  • 1Password Families
  • Teams Starter Pack
  • Business
  • Enterprise

1Password Personal Package

The 1Passw0rd package comes with a 14-day free trial period after which the price is $3.99 per mo­nth. It includes:

  • Apps for Mac, iPhone, iPad, Windows, Android, and Linux operating systems
  • Unlimited access to documents, files, and folders; unlimited number of saved passwords; and one gigabyte (GB
  • 24/7 email support
  • One year of item history to recover deleted items
  • A travel mode to safely cross international boundaries
  • An extra layer of security
  • The capability to share your sensitive information securely with anyone

1Password Family Package

The 1Password Family Plan includes a 14-day free trial period. After that, it costs $4.99 per user per month. However, you can add more users at $0.99 each.

With 1Passwords’ Family feature, you get access to all of the following features:

  • You can share up to five people at once.
  • The ability to securely store sensitive information
  • The ability to control who can view and access certain content on your computer
  • The ability to recover an account for a locked-out user

The Team Starter Pack includes everything you need to get started including:

  • Unlimited shared vaults for free
  • Admin controls for viewing and managing jobs
  • Multi-Factor Authentication (MFA) allows companies to use two different methods
  • Each user gets 1GB of cloud space for documents.
  • Five guests for limited sharing

Business Package

The Enterprise package costs $7.99 per month for each new customer after a 30-day free trial. It includes the following features:

  • VIP Support
  • Each user gets 5GB of online cloud storage space for their documents
  • You can share up to 20 different guest posts at once.
  • With our advanced protection features, you can create custom security controls for the apps
  • Each user has fine-grained read/write permissions to their own v
  • To track changes to vaults and their contents, use the activity log.
  • Design and implement custom user role permissions to manage access rights for each individual user
  • Usage reports for tracking usage patterns
  • Create custom groupings for organizing teams
  • Provisioning with ADFS, OAUTH2, and one-login

Enterprise Package

The Enterprise version includes all of the core functionality of the basic version plus additional advanced functionality not available in the Basic version. Some of these additional advanced functions include:

  • Dedicated account manager
  • Tailor-made setup training
  • Onboard engineer

All 1Password accounts come with these additional features included:

  • Unlimited Devices
  • 1Password Watchtower
  • Digital Wallet
  • Unrivaled support
  • Travel Mode
  • Advanced Encryption
  • Total privacy

With 1Password for Mac, Windows, iOS, Android, and BlackBerry 10, you can access your passwords from any device.

With 1Password Watchtower, you can get notified when certain sites are hacked or if your password has been leaked online. You can then change your password immediately.

With the Digital Wallet feature, users can securely store their credit and debit card numbers, online bank logins, and PayPal accounts so they can access them anywhere.

One password has a unique and unparalleled support system where its users can get help from their own personal account manager anytime they need it. This support is completely free and one-on-one.

When traveling abroad, the Travel Mode function allows you to erase sensitive data from devices so they don’t get confiscated by border guards. You can also easily restore access when returning home.

If you use the Advanced Encrypting File System (AES-256) option, you’re using a secure file system that employs multiple methods to encrypt files.

The Total Security feature ensures that only the owner of the account has full control over their data.

We don’t use it, we don’t share it, and we’re not selling it. You’re our client, not our merchandise.

Funding, Valuation, and Revenue of 1password

Even though 1password only raised half as much as it did in its Series A round 2 years ago, its new round of financing is still significant.

Its investors include:

  • Mike Cannon-Brookes
  • Tobias Lutke
  • Accel
  • Stewart Butterfield
  • Jay Parikh
  • Scott Farquar
  • Robert Vis
  • Skip Capital
  • Sound Ventures
  • Kevin Hartz

1Password’s current market cap has increased by double digits in the last couple of years, which suggests that the value of the business and its future growth appear to be quite positive.

According to CEO Jeff Shiner, 1Password has recently reached the $120 million annual recurring revenues (ARR) mark.

It has now grown to over 100,000 customers. That is up from 60,000 at the beginning of December 2019.

Many well-known companies include:

  • Under Armour
  • Shopify
  • the PGA
  • IBM
  • GitLab
  • Slack
  • PagerDuty

Is 1password Profitable?

The one thing we always get asked is “is 1Pass­word profitable?” The short answer is yes, and here’s why…

1PWassword, the popular online service which manages passwords for millions of people, has made over 120 million dollars annually since its inception. CEO Jeff Shiner says that 1PWassword has been profitable from day 1.

Conclusion: How Does 1password Make Money?

If you’re looking for something simple and easy to set up, then 1Password may be the best option for you. It’s free, but if you need additional functionality, there are paid subscriptions available.

So, here we go. We’ve gone through everything from 1Password’s business model in this article. We’re sure that the content above has taught you how 1Password makes its money.

Thank you for taking the time to read this post. I am happy to hear that you enjoyed it. Please feel free to leave me feedback below, and if you have any suggestions for future posts, let me know!

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