Born just 11 years ago in the heart of Silicon Valley, Californian Okta just rocked the market: this technological disbursed US $ 6.5 billion to buy Auth0, the Argentine unicorn created by Matías Woloski and Eugenio Pace and which develops authentication technologies for companies. The agreement contemplates a transfer of shares and the merger of the two companies. “What excites me is that these companies are compatible, the identity is not a division and they are complementary. This is all we do. So together, we have this opportunity to move the needle in terms of what we can offer our customers, “Pace said during the announcement.
Auth0 is still younger than Okta. It was founded in 2013 and had raised more than $ 330 million from venture capital investors, allowing it to reach a valuation of US $ 1.9 billion in July 2020. Investors include Bessemer Venture Partners, Trinity Ventures, Meritech Capital, Sapphire Ventures and Salesforce Ventures. Strictly speaking, Auth0 was the last startup to enter the exclusive club of Argentine unicorns, along with Mercado Libre, Globant, OLX and Despegar. This is how companies valued or that invoice more than US $ 1,000 million are known.
Both founders are engineers: Woloski is a computer scientist graduated from UBA and his partner, Pace, from the electronic branch trained at ITBA. Auth0 has income, but is still not profitable, something common with new ventures. Auth0’s specialty is the development of identity authentication infrastructures, which substitutes the use of passwords to access systems. Until last year they had more than 11,000 clients, including Siemens, Tarjeta Naranja and the Wall Street Journal.
Okta actually rivaled Auth0 and competed to lead in the business of secure people’s identities in the cloud, a crucial aspect at the height of wallets, online trading platforms and all kinds of virtual operations. In communicating the merger, Pace said the two companies “agree on a vision” for that identity cloud of the future, which he defined as the creation of an “identity operating system”. But on the other hand, he recognized that in this kind of development “Okta was at least several years ahead of Auth0 in scale“and said that the merger will allow Auth0 to advance” between five and ten years. “
Matías Woloski from Auth0. Photo: Luciano Thieberger.
According to Forbes, rumors that Auth0 was for sale had been going on for several weeks. But the deal did not close automatically, as Auth0 considered other options, and negotiated with other candidates. The possibility of finally go public on the Nasdaq, a path that Mercado Libre, Globant and Despegar began, in that chronological order. The acquisition it was already agreed by the directories of the two companies but is subject to regulatory approval. In this regard, the companies were confident in achieving this in the first half of the year. With this, “we’re just scratching the surface of what we do,” Pace said.
The upward trajectory of Auth0 surprises. It was already considered an emblematic case of Endeavor as a remarkable undertaking to study. After growing, it was only in May 2019 that Auth0 reached the unicorn category, obtaining a new injection of capital for US $ 103 million from Salesforce and had a market value of US $ 1.1 billion. The valuation is estimated based on the number of shares that the investor acquires in exchange for the capital contribution. This Wednesday, Okta strongly agreed with them.
Much of the unicorns and great promises come from technology. According to the specialists and due to the investments received, Ualá, Satellogic, Agrofy and Technisys are emerging to join the club. But there is another that grows without the need for financing and is getting into the big leagues: it is Etermax, the creator of Trivia Crack, one of the most successful mobile games in history. In the case of Auth0, in 2014 it received an injection of US $ 2.4 million from the Bessemer Venture Partners fund and to date it has already raised US $ 332 million.
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source https://pledgetimes.com/a-silicon-valley-company-buys-an-argentine-unicorn-for-us-6-5-billion/
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