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Okta agrees to buy rival Auth0 for $6.5 billion

The merger will see Okta’s cloud-based identity services and Auth0’s backend user management services combine

Identity access management firm Okta has agreed to purchase its main industry competitor Auth0 in a deal worth $6.5 billion (roughly £5.6 billion).

This merger will eventually see the two businesses' expertise and products unify under a single brand, with Okta’s cloud-based platform expected to combine with Auth0’s device and app-based identity management suite.

Auth0 was founded in 2013, four years after Okta was established, and recently attracted $120 million (£85.9 million) of funding in its Series F round in July last year. In doing so, it attained an overall valuation of approximately $2 billion (£1.4 billion).

Okta hopes that the merger will allow the two companies to jointly address more identity management problems and use cases than they each could alone. Both platforms will be supported, invested in, and eventually integrated with one another over time.

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

“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. We are thrilled to join forces with the Auth0 team, as they are ideal allies in building identity for the internet and establishing identity as a primary cloud.”

The company describes its own and Auth0’s services as being complementary, with customers able to opt for one or another depending on their particular needs. While this has traditionally been true, in recent years both companies have expanded their offerings to such an extent they’ve begun to encroach on each other’s customer base.

Okta had initially aimed to be a single sign-on (SSO) platform for web applications, while Auth0 carved out a reputation for providing backend user management. Product expansion has seen the lines blur, however, and the rivalry between the companies intensify.

“Okta and Auth0 have an incredible opportunity to build the identity platform of the future,” said CEO and co-founder of Auth0, Eugenio Pace.

“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 boards of both companies have approved the transaction, with the acquisition expected to finalise before the end of July 2021.

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