YC-backed Better Auth Secures $5M to Build a Dev-Friendly Authentication Tool

Y Combinator-backed Ethiopia’s Better Auth has raised $5 million in seed funding to build a dev-friendly authentication tool.

The funding round was led by Peak XV (formerly Sequoia India and Southeast Asia), with participation from Y Combinator, P1 Ventures, and Chapter One. 

The new funding will enable Better Auth to focus on enhancing its core features and launch a paid enterprise infrastructure that integrates with its open-source foundation.

Related Post: Ethiopian Startup Kubik Secures $5.2M to Expand Climate and Sustainability Solutions

Built in Ethiopia, Accepted Globally

Built from his bedroom in late 2024, Bereket Engida launched the tool after experiencing a similar challenge throughout his programming career: authentication. The available authentication tools, like Auth0 and Firebase, were either too rigid, too expensive, or didn’t let you store data in your database. 

“I remember needing an organization feature. It’s a very common use case for most SaaS applications, but it wasn’t available from these providers,” Engida told TechCrunch. “So I had to build it from scratch. It took me about two weeks, and I remember thinking, ‘There has to be a better way to solve this.”

As a result, he built something better: Better Auth. The tool is an open-source authentication framework that helps developers add secure login functionality. It supports everything from simple logins to complex role and team-based permissions, all while keeping user data in-house. It’s a TypeScript-based library that’s plug-and-play, fully self-hosted, and scalable for both startups and enterprises.

Related Post: YC-backed Djamo Raises $17M To Fuel Growth in Francophone West Africa

Since its launch on GitHub in late 2024, the library has gained rapid popularity. Amongst developers, it has been called one of the best authentication tools on the internet. 

It’s found early traction, especially among AI startups that need to customize authentication, handle tokens securely, and avoid scaling costs. Better Auth now boasts over 150,000 weekly downloads, more than 15,000 GitHub stars, and a swiftly growing community of engineers using it.

Engida’s Plan On Scaling Better Auth

Better Auth is Peak XV’s first direct investment in an African founder. The seed round saw participation from Y Combinator, Chapter One, P1 Ventures, and a group of incredible investors and angels.

“We first heard about the product from numerous startups we’ve worked with,” said Arnav Sahu, partner at Peak XV and former principal at Y Combinator. “Their auth product has seen phenomenal adoption among the next generation of AI startups.”

Related Post: Nigeria’s YC-Backed Chowdeck Secures $2.5 Million Seed Funding To Fuel Growth

Still currently free to use, Engida says Better Auth will use the funding to focus on improving its core features. It will also launch a paid enterprise infrastructure that plugs into its open-source base. This will give developers the flexibility to self-host or opt for Better Auth’s cloud add-ons as needed.

He’ll also try to scale without trading away the product’s community-built feel. The next step is to assemble a small team to assist with maintaining the codebase, enhancing documentation, and providing support to enterprise users. 

Better Auth, which graduated from YC’s 2025 spring batch, is the third Ethiopian startup to have passed through the accelerator, following drone-based digital health platform Avion and food delivery platform BeU Delivery. 

“Building this feels important not just because people love the product, but because of what it represents,” said Engida. “There aren’t many Ethiopian founders building global products. For many, it feels almost impossible. So seeing that traction gives hope for other people to try to be more ambitious.”

Main Image: Bereket Engida, CEO Better Auth. Image Credit: Better Auth