Okta CEO Todd McKinnon
Okta
Okta, whose cloud software gives office workers access to all of their apps through a secure online service, said Wednesday it will spend $ 6.5 billion to acquire rival Auth0.
Okta’s shares fell about 13% in long-term trading after the announcement. The all-stock deal equates to approximately 21% of Okta’s market cap as of Wednesday’s close. Okta said it expects the transaction to close by the end of July.
With more large companies relying on cloud-based applications, Okta has seen its revenue increase since its IPO in 2017. The company said in its earnings review on Wednesday that its fourth-quarter revenue grew 40% to $ 234.7 million. The net loss amounted 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.
Todd McKinnon, co-founder and CEO of Okta, was previously a vice president at Salesforce and worked under Marc Benioff for more than five years. McKinnon now takes a page from Benioff’s playbook, pays for acquisitions, and continues to focus on internal growth.
Salesforce has been the largest software acquirer in recent years, agreeing to buy Slack in December for $ 27.7 billion. Before that, Salesforce bought Tableau for $ 15.3 billion in 2019 and MuleSoft for $ 6.5 billion a year earlier.
McKinnon wrote in a blog post that Auth0 will continue to operate independently. For years, he said Auth0 CEO Eugenio Pace, calling 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 selecting an identity platform is one of the most critical technology investments an organization can make.” McKinnon wrote.
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