Okta Inc. is the latest technology startup to ride the growing tide of business cloud computing to a billion-dollar valuation.
The San Francisco startup said it raised $75 million from existing shareholders, including the round’s lead investors Andreessen Horowitz, Greylock Partners and Sequoia Capital. The deal valued Okta at nearly $1.2 billion, including the value of the newly purchased shares, said Okta CEO and co-founder Todd McKinnon. That is an increase from the $675 million valuation in Okta’s stock sale announced in June 2014.
Okta, founded in 2009 by two early officials at cloud-computing pioneer Salesforce.com Inc., is among the roster of startups capitalizing on the growing use of Web-friendly, or cloud, software in the workplace. Okta’s software is essence a cloud connector to tie together the myriad software applications that a company and its workers use.
Okta’s software makes it easy for workers to have a single, secure login for the Web services they use for their job, or for those used by contractors, partners and customers. One of Okta’s major selling points is security, as a way for businesses to let employees and other people access corporate information remotely without compromising sensitive corporate information. When an employee leaves, his company also can use Okta to quickly revoke access to all the workplace services he used.
The company says it has more than 2,500 customers, including professional networking site LinkedIn Corp., casino operator MGM Resorts International and money-transfer firm Western Union Co. Mr. McKinnon declined to give Okta’s financial details. There are a host of companies, including software giants Microsoft Corp. and Salesforce.com Inc., also competing to be the single point for companies and their Web services. Other startups, including Ping Identity Corp. and Centrify Corp., also are Okta competitors.
Okta has now raised about $230 million, the company said. Other firms buying stock in the latest financing include venture-capital firm Khosla Ventures and asset managers Altimeter Capital Management and Glynn Capital Management.
Mr. McKinnon and Frederic Kerrest, who were both early employees at Salesforce.com Inc., founded Okta more than five years ago when cloud software was still a niche technology for workplaces. Andreessen Horowitz was among Okta’s original investors, and firm partner Ben Horowitz said the original problem the startup sought to tackle seemed simple but was surprisingly tough: Corporations didn’t know which software they or their workers were using, nor how to set limits on which software they were permitted to access.
“That was a question nobody could answer, so that seemed at the time like a good place to start,” Mr. Horowitz said in an interview earlier this year.