Why Global Identity Management Platform Saviynt Prefers Debt To Equity

When it comes to identity management portfolios, Saviynt is a rockstar name in the industry.

However, currently, Saviynt demonstrated that there is real investor enthusiasm for identity management platforms when it today announced that it raised $205 million in debt from AB Private Credit Investors’ Tech Capital Solutions group.

While returning again this week as Saviynt's CEO alongside the newly-appointed President, Paul Zolfaghari, founder, Sachin Nayyar, said that the loan will be put toward expanding Saviynt’s platform, acquiring customers, and growing the company’s partner ecosystem.

He noted that the investment brings Saviynt’s total raised to date to $270 million following a $130 million debt raise in 2021, making Saviynt one of the better-funded startups in the identity management space.

When asked why Saviynt preferred debt to equity, Nayyar declared, “The best funding option aligned to the company’s growth needs.”

It’s also, perhaps, a reflection of the tough economic reality. Global venture funding in 2022 declined 35% year over year from 2021, according to Crunchbase data, while Q4 2022 saw the lowest amount invested since Q1 2020.

As traditional capital becomes tougher to attain, venture debt — which was already gaining traction in some entrepreneurial circles — is expected to become big for startups in 2023.

“Despite the current funding environment, the investment interest was especially strong for a high-growth identity company like Saviynt,” Nayyar told TechCrunch in an email interview.

“Identity management is a priority area of spending among large enterprises and mid-sized companies even during this volatile economic period because identity has become the new perimeter and is critical to cyber security.”

Owing in part to the lingering effects of the pandemic, it probably helps to think of identity management as having a moment. 

Naturally, the transition to remote work culture has forced companies to redefine the way they identify users and control access to assets on their networks. 

During the 2020 pandemic, one survey discovered how 61% of companies recognised the strategic importance of identity management and planned to increase their budgets in 2021. 

Moreover, there are those investors who chase after trends that have also decided to up their stakes in identity management.

 According to Crunchbase's reports, about $3.2 billion in venture dollars went into the identity management sector in 2021, up 2.5x from last year’s $1.3 billion.

Nayyar founded Saviynt in 2011 while hanging on until 2018 prior to his most recent stint.

However, before he launched the company, Nayyar served as the chief identity strategist for Sun Microsystems and president of Brinqa, the cybersecurity risk management platform. 

Soon after exiting from Saviynt, he served as the CEO of cybersecurity firm Securonix, where he led a $1 billion-plus growth investment from Vista Equity Partners last year.