Okta CEO Todd McKinnon
Okta, whose cloud software allows office workers to access all of their apps through a secure online service, said on Wednesday that it’s spending $6.5 billion to acquire rival Auth0.
Okta’s shares plunged about 13% in extended trading after the announcement. The all-stock deal equals about 21% of Okta’s market cap as of Wednesday’s close. Okta said it expects the transaction to close by the end of July.
With more large businesses counting on cloud-based applications, Okta has seen its revenue surge since its 2017 IPO. The company said in its earnings statement on Wednesday that fourth-quarter revenue jumped 40% to $234.7 million. Its net loss widened to $75.8 million from $50.4 million a year earlier.
Auth0 last raised private capital in July at a $1.92 billion valuation. Salesforce Ventures led the round. Okta co-founder and CEO Todd McKinnon was previously a vice president at Salesforce.
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