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Okta and Auth0 are set to focus on the identity on the internet, that is today a billion-dollar industry.
Okta Inc (NASDAQ: OKTA) stock closed yesterday trading at $241.22, down 6.89%. The dip accelerated further during the pre-market trading session, as it was down approximately 10.66% according to MarketWatch. The sudden dip was associated with an announcement from Okta that it will purchase Auth0 for $6.5 billion.
However, the deal is expected to be finalized by next year during the second quarter. Okta stock shareholders sold their stake yesterday despite the company having reported revenue of $234.7 million, up 40%, during the fourth quarter.
According to its earnings report on Wednesday, the net loss widened to $75.8 million from $50.4 million a year earlier.
In a bid to reach out a bigger market share, Okta has taken a step by joining forces with its rival Auth0. Meanwhile, the dual is expected to work independently as they integrate their activities slowly with time.
Auth0 Acquisition by Okta
According to a blog post by the CEO and co-founder of Okta Todd McKinnon, the acquisition is very strategic and in line with its bigger picture. Okta and Auth0 are set to focus on the identity on the internet, a billion-dollar industry.
Notably, most global businesses are changing their mode of operation to cloud platforms, particularly remote working. Identifying their customers and employees is an issue that needs to be addressed to keep the company safe from attackers.
“Together, we will shape the future of identity on the internet. I’m thrilled by the choice, flexibility, and value we’ll offer customers: Okta and Auth0 address a broad set of identity use cases, and our identity platforms are robust and extensible enough to serve the world’s largest organizations and most innovative developers,” McKinnon noted in the blog.
Speaking in an interview earlier, McKinnon notes that the company has grown tremendously, especially during the pandemic. Further, he expects more customers to reciprocate to higher revenue in the coming quarters. “The customer part is growing faster than the workforce part. We have 10,000 customers, and there are millions of customers that could use both of our solutions,” he explained.
Auth0 has significantly benefited from the ongoing coronavirus pandemic as it offers much-needed cloud computing services. Notably, the company raised more than $330 million from private investors including Bessemer Venture Partners and Salesforce Ventures. Auth0 was valued at approximately $1.92 billion last year.
The company was founded by Eugenio Pace and Matias Woloski in 2013. Over the years, it has grown to a huge company that delivers to customers worldwide.
Okta is now valued at approximately $33.53 billion, and its stock rallied approximately 83.66% last year.
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