Okta's cofounder explains why it's buying an automation startup for $52.5 million in its biggest deal yet
Okta. Used by permission.Okta CEO Todd McKinnon
- On Thursday, Okta announced it will acquire the automation startup Azuqua for $52.5 million - its largest acquisition to date.
- Okta says that it's acquiring Azuqua for its talent and technology - Okta helps customers log in to many apps with one user name and password; Azuqua could help it
- This acquisition is expected to close at the end of Okta's first fiscal quarter.
Okta announced Thursday during its earnings call that it will acquire startup Azuqua for $52.5 million - its largest acquisition to date.
Azuqua, which was founded in 2013 and raised some $16 million, helps people automate their work and connect their applications without having to write code or do any repetitive manual tasks. This acquisition is expected to close at the end of Okta's fiscal first quarter.
Its platform will be integrated into Okta's flagship identity management tool, which helps customers log in to many work apps with just their corporate username and password. Okta says that Azuqua's software will make it possible for customers to share data between those apps, too.
"It's a great technology and a great team. It's supercharging a product we have," Frederic Kerrest, COO and co-founder of Okta, told Business Insider. "If you look at how they see the world and how they think about integration platforms, it's a very good alignment with what we do."
In addition, Okta has been working to aggressively grow its product engineering teams, and the company felt Azuqua had the right talent to help it go further, Kerrest says.
"Azuqua is a very good fit from a team and technology perspective," Kerrest said. "Most of the engineering innovation you'll continue to see, that's all organically growing. As we see opportunities we're going to continue to be aggressive."
Going forward, Okta will continue to look into acquisitions in the security infrastructure and identity management space, as well as other companies that support its product, Kerrest says.
"Everyone's going to the cloud," Kerrest said. "Everyone's going through digital transformation. Everyone's prioritizing software nowadays. Security is just the forefront of everyone's minds. We're at the right place and at the right time, and we're really focused on customer success."
In 2017, Okta acqui-hired the authentication startup Stormpath, and last year, it acquired security startup ScaleFT.
As for Okta's earnings, it posted a loss of $0.04 per share on about $115 million in revenue - ahead of Wall Street expectations, and about 50% higher than the same period a year ago. However, the company also posted lower-than-expected guidance for the next quarter and its full fiscal year, and the stock is sliding as low as 7% in after-hours trading on Thursday.