Todd McKinnon, CEO of Okta
Okta
Okta, whose cloud software allows office workers to access all of its applications through a secure online service, said on Wednesday that it is spending $ 6.5 billion to acquire rival Auth0.
Okta’s shares plunged around 13% in the trading period after the announcement. The all-share deal amounts to about 21% of Okta’s market capitalization at the close of Wednesday. Okta said it expects the transaction to be completed by the end of July.
With more large companies relying on cloud-based applications, Okta has seen its revenue increase since the 2017 IPO. The company said in its earnings statement on Wednesday that fourth quarter revenue jumped 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.
Okta’s co-founder and CEO, Todd McKinnon, was previously Vice President of Salesforce, working with Marc Benioff for more than five years. McKinnon is now picking up a page from Benioff’s manual, paying for acquisitions while still focusing on internal growth.
Salesforce has been the largest software acquirer in recent years, agreeing in December to buy Slack for $ 27.7 billion. Prior to that, Salesforce purchased Tableau for $ 15.3 billion in 2019 and MuleSoft for $ 6.5 billion a year earlier.
McKinnon wrote in a blog that Auth0 will continue to operate independently. He told Auth0 CEO Eugenio Pace for years, calling him “an enthusiastic ally in establishing identity as a primary cloud.”
“Eugenio and I dedicate our careers to identity because we know that selecting an identity platform is one of the most critical investments in technology that an organization can make.” McKinnon wrote.
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