Enterprise identity software company Okta is preparing to buy rival authentication platform Auth0 in a deal worth around $8.3 billion (US$6.5 billion).
Okta announced the acquisition in a note to investors on Thursday, saying Auth0 will continue operating as its own a business unit while the two companies become integrated.
CEO and co-founder of Okta, Todd McKinnon said he was “thrilled” to join with Auth0.
“In an increasingly digital world, identity is the unifying means by which we use technology — both at work and in our personal lives,” he said.
“With so much at stake for businesses today, it’s critical that we deliver trusted customer-facing identity solutions.”
Okta’s focus has largely been providing its software to enterprises for controlling employee credentials through password managers and multi-factor authentication but the Auth0 acquisition will help it cover a broader customer base.
Auth0 was founded in 2013 by former Microsoft employees Matias Woloski and Eugenio Pace.
The platform was designed as a customisable way for developers to give their users secure access to applications with minimal interaction.
Pace praised the billion-dollar buy-out, saying the two companies will together “accelerate [their] customers’ innovation” with their similar suites of identity authorisation products.
For McKinnon, Auth0’s emphasis on building a platform targeted at developers made them a solid candidate for the large takeover.
“They are ideal allies in building identity for the internet and establishing identity as a primary cloud,” he said.
“Auth0’s DNA is rooted in developers, and I’ve always admired their sharp focus and leadership in developer-led identity.”
Okta’s share price dropped 10 per cent in after-hours trading following the announcement.