YC Alumni Better Auth Secures $5 Million Seed Funding

Better Auth, an open-source framework, provides tools for developers to manage user authentication. The company recently secured approximately $5 million in seed funding. This investment aims to support the development of core features and the introduction of a paid enterprise infrastructure.

The round was led by Peak XV. Participating investors included Y Combinator, P1 Ventures, and Chapter One.

Better Auth offers a TypeScript-based authentication framework designed to allow developers to access user data via open-source libraries. It supports common permissions use cases, such as teams and roles, and is designed to scale with plug-ins. A key differentiator is its ability to integrate directly into a developer's codebase, enabling user data to remain on-premise within their own database, rather than being stored externally by third-party services.

The product has gained traction since its release on GitHub in September 2024. Better Auth reports over 150,000 weekly downloads, more than 15,000 GitHub stars, and a community exceeding 6,000 Discord members. The library has also seen adoption among early-stage AI startups, which require custom authentication flows, secure token management, and scalable solutions without incurring high costs.

"Their auth product has seen phenomenal adoption among the next generation of AI startups," commented Arnav Sahu, Partner at Peak XV.

Competitors in the authentication tools market include companies such as Auth0, Firebase, and NextAuth. These providers typically offer managed services that store user data externally, often impose limitations on customization, and can become expensive as usage scales. Better Auth differentiates itself by offering an open-source library that allows developers to keep user data on-premise within their own databases.

Founded by Bereket Engida, a self-taught programmer from Ethiopia, Better Auth built its initial product in Ethiopia. The company recently graduated from Y Combinator's spring batch. Future plans for Better Auth include enhancing its core features and launching a paid enterprise offering that integrates with its open-source base. This will provide developers with options for self-hosting or utilizing Better Auth’s cloud add-ons. The company also intends to expand its team to maintain the codebase, improve documentation, and support enterprise users.