Through their complementary identity platforms, the companies are expected to address a wide set of identity use cases

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Okta signs an all-stock deal to acquire Auth0. (Credit: Pete Linforth from Pixabay)

Okta, a US-based identity and access management company, has agreed to acquire Auth0, an identity platform for application teams, in an all-stock deal worth around $6.5bn.

Headquartered in Seattle, Auth0 through its platform enables enterprises to authenticate, authorise, and secure access for applications, users, and devices.

In July last year, the company raised $120m in a Series F funding round led by Salesforce Ventures to take its valuation to $1.92bn.

In May 2019, Auth0 secured $103m in a Series E round led by Sapphire Ventures to get the “unicorn” status.

Okta, on the other hand, has developed an identity cloud, claimed to help organisations in securely connecting the right people to the right technologies.

The publicly-traded company’s clients include JetBlue, Slack, T-Mobile, Nordstrom, Takeda, Twilio, and Teach for America.

The combination of Okta and Auth0 is expected to address a wide set of identity use cases through their complementary identity platforms.

Furthermore, the deal will speed up Okta’s growth in the identity market.

Okta CEO and co-founder Todd McKinnon said: “Combining Auth0’s developer-centric identity solution with the Okta Identity Cloud will drive tremendous value for both current and future customers.

“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.”

Auth0 will operate as a standalone business unit of Okta.

Auth0 CEO and co-founder Eugenio Pace said: “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.”

The deal is subject to regulatory approvals and meeting other customary closing conditions. It is anticipated to close during the quarter ending 31 July 2021.

Apart from the acquisition, Okta reported revenue of $234.7m for the fourth quarter fiscal 2021, a 40% increase year-over-year. The company’s full-year fiscal 2021 revenue was $835.4m, which is a 43% increase year-over-year.