A very big new acquisition has happened in the tech industry, with Okta (NASDAQ: OKTA), the publicly-traded cloud identity and access management software provider, announcing an agreement to buy Auth0, a fellow cloud identity software provider, for a price of $6.5 billion to be paid all with shares.

A $6.5 billion exit for Auth0 marks a major win for the startup scene in Seattle, the tech hub where Auth0 is based and also a major win for the company’s backers and investors. Auth0 last raised venture funding last year in July with a $120 million Series F round that valued the company at $1.9 billion. Now, it’s about to sell for more than triple that amount.

• Auth0 has raised more than $330 million in total venture funding, with investors including the likes of Salesforce Ventures, Bessemer Venture Partners, Telstra Ventures, Sapphire Ventures, and DTCP. Salesforce Ventures led Auth0’s most recent $120 million Series F round.

• With its acquisition of a fellow cloud identity and authentication software provider, Okta is aiming to strengthen its presence in the cloud identity market, one that’s estimated to be worth $55 billion. 

• Auth0 currently has an annual run rate of over $200 million.

• The boards of both companies have approved Okta’s Auth0 acquisition agreement. A final sale is expected to be completed in Okta’s second quarter of fiscal year 2022, which is the quarter ending July 31, 2021.

“Okta and Auth0 have an incredible opportunity to build the identity platform of the future,” Auth0 CEO Eugenio Pace said about its sale in a statement. “..By joining forces, we will accelerate our customers’ innovation and ability to meet the needs and demands of consumers, businesses and employees everywhere,” he said.

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