Better Auth, an Ethiopian open-source developer tool for authentication, has raised $5 million in seed funding to accelerate product development and expand its infrastructure offering. The round drew participation from Peak XV Partners (formerly Sequoia Capital India and Southeast Asia), Y Combinator, P1 Ventures, and Chapter One — a notable mix of global investors and African-focused funds. The investment comes shortly after Better Auth completed the Y Combinator Spring 2025 batch, becoming only the third Ethiopian startup to join the prestigious accelerator.

The intent of this investment is multifaceted. Better Auth plans to strengthen its open-source core, improve developer documentation, and roll out a paid enterprise-grade infrastructure that can plug into the existing framework. This infrastructure will give companies the flexibility to self-host their authentication stack or integrate with cloud-based add-ons that Better Auth will offer.

Notably, the startup is currently free to use, a strategy aimed at driving mass adoption and community contribution. However, the newly secured funding will also support the hiring of a small engineering team, enabling founder Bereket Engida to scale the product without compromising the open-source ethos that helped it gain traction.

Since its GitHub debut in September 2024, Better Auth has seen explosive growth: over 150,000 weekly downloads, 15,000+ GitHub stars, and a Discord community exceeding 6,000 developers, according to company figures. These indicators suggest the project has moved well beyond early experimentation into critical adoption territory — especially among AI startups and early-stage B2B platforms.

Why the Investors Invested

Investors backing Better Auth were drawn not merely by its technical promise, but by compelling market signals, adoption metrics, and the strategic opportunity to back a fast-growing infrastructure play with global relevance.

Authenticating users is a universal problem for developers — yet existing solutions such as Auth0, Firebase, and NextAuth are increasingly viewed as rigid, expensive, or over-engineered. Better Auth’s value proposition lies in returning full control to developers, enabling them to manage authentication on-premise, directly within their own database, and fully customize logic to suit their stack. This approach is especially attractive to AI startups, which need to manage tokens, integrate with proprietary APIs, and operate without handing over sensitive user data to third-party vendors.

For Peak XV, Better Auth represents an opportunity to back a critical layer in the developer toolchain, akin to investing in GitHub or Vercel in earlier cycles. As Arnav Sahu of Peak XV noted, several startups in their network were already using the library organically — a strong grassroots signal that prompted deeper engagement. Importantly, this is also Peak XV’s first direct investment in a founder from Africa, reflecting a growing awareness among top-tier VCs that technical talent and product innovation are increasingly global.

For Y Combinator, Better Auth checks many of the boxes the accelerator prioritizes: a fast-moving solo founder with deep domain insight, strong organic traction, and a high-potential open-source base with long-term monetization pathways. Y Combinator’s confidence in solo founders who demonstrate full-stack capability — especially in developer tools — has historically been high, and Engida’s track record of building and scaling projects alone fit the bill.

The investors also appear to be betting on the narrative and visibility of backing a rare African solo technical founder who has reached global product-market fit from within the continent. In an ecosystem still largely underrepresented on the global infrastructure map, this is both a commercial and symbolic move.

A Look at Better Auth

Better Auth was founded in 2024 by Bereket Engida, a self-taught developer from Ethiopia who began programming at the age of 18. His journey into tech began when a friend refused to help him build a small e-commerce search app. Undeterred, Engida taught himself to code and began building solo projects — including a web analytics tool — before identifying a recurring issue: authentication.

Throughout multiple freelance and remote software jobs, Engida observed that existing authentication services were either inflexible, costly, or lacked essential features like role-based permissions or organizational structures. After a frustrating experience building an organization feature from scratch, Engida scrapped his existing work and began creating a new authentication framework from the ground up, using TypeScript and driven by an open-source philosophy.

The result was Better Auth, a library that allows developers to handle sign-ins, sign-outs, password resets, role assignments, and more — with just a few lines of code and full backend integration. Unlike managed services that store user data externally, Better Auth gives companies the tools to keep all authentication logic and user data in-house, an increasingly critical need in a world of data privacy regulations and high compliance standards.

Since its launch, Better Auth has resonated deeply with AI startups, developer-focused teams, and early-stage platforms that need high-performance, customizable auth flows without spiraling cloud bills. Its open-source nature and scalability through plug-ins make it ideal for teams that need flexibility and security from day one.

Even more impressive is that the initial version was built entirely from Bereket’s bedroom in Ethiopia — long before he relocated to the United States for Y Combinator. That origin story, coupled with the tool’s rapid traction, has made Better Auth one of the most promising developer infrastructure startups of the year.

It is rare to see solo African founders — particularly from countries like Ethiopia — secure major venture backing in deep tech or infrastructure software. Most African startups tend to be co-founded teams focused on fintech or logistics, with funding often tied to more commercially visible sectors. Infrastructure tools, especially open source developer products, demand both advanced technical skill and long-term vision — traits that investors typically associate with teams from Silicon Valley or Europe. That Bereket Engida built and scaled Better Auth alone, from Ethiopia, into a globally adopted tool makes his story a striking exception in the African tech landscape.

Engida remains heavily involved in writing code and maintaining the project’s technical direction. But with the new capital, he’s laying the groundwork for a lean team, improved developer support, and a commercial roadmap that will preserve the authenticity of the open-source community while capturing enterprise value.

Better Auth’s headquarters are now split between Ethiopia and the U.S., but its ambitions — and its user base — are truly global.