When the identity and access management company Okta announced earnings, it revealed that it’s buying cloud identity start-up Auth0 for USD 6.5 billion. The company was valuated as USD 1.92 billion when it raised USD 120 million in a funding series led by Salesforce Ventures in July.
With the company Auth0, Okta will have a cloud identity company in its kitty that supports developers embed identity management into applications while adding a whole new dimension to the identity platform.
Okta’s Co-founder and CEO Todd McKinnon says that the acquisition gives the company good coverage in the identity space. The purchase has the power to take up the identity to first-class cloud category with infrastructure, enterprise software such as collaboration and CRM.
“There are a few other [primary cloud categories], but one of those has to be identity. And for identity to rise to that status, it has to cover all the use cases. It’s got to be both workforce and customer. So workforce [has been] our [primary] business traditionally, and customer is newer,” McKinnon said.
It helps the customers by allowing them to use Okta/Auth0 on the back end to sign in to the platform instead of by putting in only the corporate credentials. The co-founder and CEO Auth0 Eugenio Pace sees both the companies together (Auth0 and Okta) as a good combination for identity management. And there is no exaggeration to this statement. “Together, we can offer our customers workforce and customer identity solutions with exceptional speed, simplicity, security, reliability, and scalability. By joining forces, we will accelerate our customers’ innovation and ability to meet the needs and demands of consumers, businesses, and employees everywhere,” Pace said in a statement.
Pace and CTO of Auth0, Matias Woloski worked in Microsoft until they launched their start-up in 2013. As McKinnon points mention that Auth0 is a substantial company with 800 employees. And the revenue is expected to cross the number of USD 200 million.
“So they have this mindset of building a service that is flexible and API-driven and great tools for developers and all the extensibility or customizability that developers would need. And you can’t, you can’t do that later, you have to start from the beginning,” Pace added.
Pace also mentioned their focus on developers in 2019, saying, “We’re not profitable because we’ve chosen to reinvest and continue to sustain the large scale of growth. But we are more efficient every day — in the way we acquire customers, the way we service customers, in the way we ship new design capabilities.”
It was founded in 2013 and raised more than USD 300 million along the way. Additionally, there were other investors, including Sapphire Ventures, Meritech Capital Partners, and Bessemer Venture Partners.