Okta is buying its security rival Auth0 for $ 6.5 billion, shares fall – tech2.org

Okta is buying its security rival Auth0 for $ 6.5 billion, shares fall


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 Wednesday that it is spending $ 6.5 billion to acquire rival Auth0.

Okta shares plunged about 13% in extended trading after the announcement. The all-share deal equates to approximately 21% of Okta’s market capitalization as of Wednesday’s close. Okta said he expects the transaction to close in late July.

With more large companies running cloud-based applications, Okta has seen its revenue increase since its initial public offering in 2017. The company said in its earnings statement Wednesday that fourth-quarter revenue increased 40% to 234, 7 million dollars. Its net loss widened to $ 75.8 million from $ 50.4 million a year earlier.

Auth0 last raised private equity in July at a valuation of $ 1.92 billion. Salesforce Ventures led the round, tripling their money in eight months.

Okta Co-Founder and CEO Todd McKinnon was previously Vice President of Salesforce and worked with Marc Benioff for more than five years. McKinnon is now taking a page out of Benioff’s playbook, paying for acquisitions while still focusing on internal growth.

Salesforce has been the biggest software buyer in recent years, agreeing to buy Slack for $ 27.7 billion in December. Before that, Salesforce bought Tableau for $ 15.3 billion in 2019 and MuleSoft for $ 6.5 billion the year before.

McKinnon wrote in a blog post that Auth0 will continue to operate independently. He said that for years Auth0 CEO Eugenio Pace called 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.

This is a news flash. Please update for updates.

CLOCK: Salesforce $ 27.7 Billion Settlement for Slack

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