Okta Inc., an independent identity provider, is acquiring Auth0, another identity platform to manage customer profiles, for $6.5 billion. The acquisition is synergetic as the companies’ have a shared vision of providing safe-use technology, shaping the future of identity on the internet.
Okta has performed well in the last year with its shares going up nearly 84% because of the increasing use of its cloud-based services by companies to facilitate work from home.
Auth0 will operate as an independent business unit inside of Okta, and both platforms will be integrated over time. This will give their customers greater choice in selecting identity solutions for their unique needs.
At its earnings call today, Okta announced it is buying cloud identity provider Auth0 for a whopping $6.5 billion.
“Combining Auth0’s developer-centric identity solution with the Okta Identity Cloud will drive tremendous value for both current and future customers,” said Todd McKinnon, Chief Executive Officer and co-founder, Okta. “In an increasingly digital world, identity is the unifying means by which we use technology — both at work and in our personal lives. With so much at stake for businesses today, it’s critical that we deliver trusted customer-facing identity solutions. Okta’s and Auth0’s shared vision for the identity market, rooted in customer success, will accelerate our innovation, opening up new ways for our customers to leverage identity to meet their business needs.”
Auth0 offers a platform allowing businesses to authenticate those using their services, including both consumers and other companies. “Basically, we make your login box awesome,” advertises the company.
The continual digital transformation and global growth of cloud and hybrid IT, has made identity platforms a critical investment for organizations. Such platforms help companies to streamline processes, reduce costs and provide security.
“Okta and Auth0 have an incredible opportunity to build the identity platform of the future,” said Eugenio Pace, Chief Executive Officer and co-founder, Auth0. “We founded Auth0 to enable product builders to innovate with a secure, easy-to-use, and extensible customer identity platform. 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.”
Okta will acquire Auth0 for approximately $6.5 billion in a common stock based on a share price of $276.21. The boards of directors of Okta and Auth0 have approved the transaction. The proposed transaction is subject to regulatory approvals and is expected to close during Okta’s second quarter of fiscal year 2022.
Okta also said it expects revenue to grow 29% to 30% for its new fiscal year to at least $1.08 billion. That would mark a slowdown from the 43% revenue growth it recorded between the two prior years.
Auth0 is focused on the $25 billion customers’ identity market, while Okta’s main end market is workforce identification, worth about $30 billion.
According to the site, clients that use Auth0 include companies tied to travel, financial services, and healthcare.