Octa CEO Todd McKinnon
Okta
Okta, whose cloud software allows office workers to access all of its applications through a secure online service, said Wednesday it would spend $ 6.5 billion on acquiring rival Auth0.
Okta shares fell about 13% in extended trading after the announcement. The securities deal equates to approximately 21% of Okta’s market capitalization at the close of Wednesday. Okta said he expects the transaction to close in late July.
With more large companies relying on cloud-based applications, Okta has seen its revenue rise since its 2017 IPO, the company said Wednesday in its income statement that fourth-quarter revenue increased a 40%, to $ 234.7 million. Its net loss extended to $ 75.8 million, from $ 50.4 million a year earlier.
Auth0 raised private equity for the last time in July with a valuation of $ 1.92 million. Salesforce Ventures led the round, more than tripling its money in eight months.
Okta co-founder and CEO Todd McKinnon was previously vice president of Salesforce, working under Marc Benioff for more than five years. McKinnon now pulls out a page from Benioff’s playbook, 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 bought Tableau for $ 15.3 billion in 2019 and MuleSoft for $ 6.5 billion the previous year.
McKinnon wrote in a blog post that Auth0 will continue to operate independently. He said Auth0 CEO Eugenio Pace for years, calling him “an enthusiastic ally in establishing identity as the main cloud.”
“Both Eugenio and I have dedicated our careers to identity because we know that selecting an identity platform is one of the most important technological investments an organization can make.” McKinnon wrote.
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I WILL SEE: Salesforce deal with $ 27.7 billion for Slack