Todd McKinnon, CEO of Octa
Octa
Okta, whose cloud software gives office workers access to all their programs through a secure online service, said on Wednesday that it was spending $ 6.5 billion to acquire rival Auth0.
Okta’s shares fell 13% in long-term trading after the announcement. The deal for all shares is equal to about 21% of Octa’s market capitalization since the close on Wednesday. Okta said it expects the deal to be completed by the end of July.
With more large companies relying on cloud-based applications, Okta has seen its revenue rise since its 2017 IPO. The company said in its earnings statement on Wednesday that revenue from the fourth quarter rose 40% to $ 234.7 million. Its net loss increased to $ 75.8 million from $ 50.4 million a year earlier.
Auth0 last raised private capital in July at a valuation of $ 1.92 billion. Salesforce Ventures led the round, more than tripling its money in eight months.
Octa, co-founder and CEO, Todd McKinnon, was previously a vice president at Salesforce, and worked under Marc Benioff for more than five years. McKinnon is now taking a page from Benioff’s playbook and paying for acquisitions while still focusing on internal growth.
Salesforce was the largest software acquirer in recent years, agreeing in December to buy Slack for $ 27.7 billion. For that, Salesforce bought Tableau in 2019 for $ 15.3 billion and a year earlier MuleSoft for $ 6.5 billion.
McKinnon wrote in a blog post that Auth0 will continue independently. He says Eugenio Pace, CEO of Auth0, calls him an enthusiastic ally in establishing identity as a primary cloud. ‘
“Both Eugenio and I have dedicated our careers to identity because we know that choosing an identity platform is one of the most important technological investments an organization can make.” McKinnon wrote.
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