Auth0, a Bellevue software firm that helps verify people’s online identities, will be acquired by San Francisco-based rival Okta in an all-stock deal valued at $6.5 billion, the companies announced Wednesday.
“Okta and Auth0 have an incredible opportunity to build the identity platform of the future,” said Eugenio Pace, Auth0’s CEO and co-founder, in a statement about the deal, which is expected to close by July 31, pending regulatory and other approvals.
The deal would cap the remarkable growth story of Auth0, which was founded in 2013. The firm develops technology that customers use to verify and protect people’s online identities. Auth0 also offers a software service that companies can use to create secure online logins with features such as two-factor authentication.
As of July, Auth0 had raised more than $330 million from investors and had a valuation of $1.92 billion. It has more than 850 employees worldwide.
Despite Auth0’s rapid growth, Pace said the acquisition makes strategic sense. “We believe together with Okta, we can do more for our customers and the industry than independently,” Pace said in a separate emailed statement.
Okta CEO Todd McKinnon sees the deal as helping increase Okta’s share of the $55 billion identity market. “Today, we’re taking a significant step forward — I’d go so far to call it a ‘leap,'” McKinnon said in a blog post.
Auth0 will add thousands of customers and hundreds of millions of users and enable Okta to expand its international footprint, McKinnon said on an earnings call with analysts Wednesday. Forty percent of Auth0’s revenue comes from outside the U.S., Pace said on the call.
Auth0 will operate as an independent business unit within Okta, and Pace will remain as Auth0’s CEO and report to McKinnon as part of Okta’s executive leadership team. No staff reductions or other changes are planned, an Auth0 spokesperson said.