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What justifies the huge subscription price increase?
Today I received an email from 1Password with the message of a price increase.
Current price: €31.80 EUR / year New price: €43.80 EUR / year
This is an enormous price. Can someone from 1Password...
Hey everyone! We hear the concerns about AI, especially when it comes to privacy and security. That’s completely fair. We want to clarify and be very transparent about how this specific feature actually works.
We use AI internally to help create and maintain a reference list of common websites, things like primary URLs, login URLs, and human-readable names. This work happens entirely on our own systems, not on your device. That information is compiled into a static database. When you create a new login item in the browser extension, 1Password simply checks that database and applies the appropriate readable name. For example, it might label a login “American Airlines” instead of “aa.com” or “AA.” That’s what the AI-powered item naming feature (launched in 2024) actually is, essentially a smart lookup table that makes saved items clearer and easier to find.
Importantly, this doesn’t access or analyze your vault, your data stays end-to-end encrypted, nothing from your vault is sent to any AI systems, and no external AI services or large language models are involved.
We know AI raises important questions, especially when it comes to security and privacy. Our approach is intentionally limited and privacy-respecting, designed to improve usability without ever touching your vault data.
The email attempting to justify the reason for the 20-33% increase doesn't make any sense.
They say they've "invested significantly in new features", but most of the new features are aimed at corporate users, or are incremental improvements to existing features they had for years. That's exactly what your subscription pays for them to do - gradually improve and invest more using the additional income additional users provide.
Without putting prices up, 1Password annual recurring revenue (ARR) has increased dramatically:
2019: ~$60 million ARR
2021: $120 million–$150 million ARR
2022: $200 million+ ARR
2023: $250 million+ ARR
2024: ~$318 million ARR
Nov 2025: >$400 million ARR
When they took the first $200M of venture capital money 6 years ago Dave Teare promised it wouldn't change 1Password, and said they had "no need" for the money. So why do they need more now, when they're richer than ever?
Yes, there are costs to store our data on their servers, but for them, that gets cheaper per customer over time as their customer-base expands. If, for example, each server can host 10,000 users data, as the number of customers on that server goes up, the cost per customer goes down. Economies of scale. They're still paying the same server costs regardless of how many are stored on there. Plus, server costs go down over time, not up! For my web design business I get higher spec servers, with more storage and speed for the same or less money than I was paying 5 years ago. I can pass that saving on to my customers or add extras for the same price.
They're not being honest with us. It'd be nice for an honest explanation.
I'm pretty convinced that they're moving to a model primarily for businesses. Nothing in the email justifies that amount of an increase, and your analysis proves it. I'll be moving on.
