Its two founders created the company eight years ago with an investment of about $ 50,000. It was acquired by its main competitor
Auth0, the digital identity management company created in Argentina by entrepreneurs Eugenio Pace and Matías Woloski in 2013, was sold for US $ 6.5 billion, according to the company, to Okta, a US company that was one of its main competitors.
Two years ago, Auth0 received an investment of $ 103 million and had a market value of $ 1.1 billion. In this way, it surpassed the valuation figure of one billion (1,000 million in the US) and joined the group of local companies that make up MercadoLibre, Globant and OLX, the Argentine unicorns.
“The transaction will accelerate Okta’s growth in a $ 55 billion identity market. Auth0 will operate as a separate business unit within Okta“, the company detailed in a statement.
“In an increasingly digital world, identity is the unifying means by which we use technology, both at work and in our personal lives. With so much at stake for companies, it is essential that we offer reliable identity solutions. Okta and Auth0’s shared vision will accelerate our innovation, opening up new ways for our clients to leverage identity to meet their business needs. We are delighted to join forces with the Auth0 team. ” Todd McKinnon, CEO and Co-Founder of Okta.
“Okta and Auth0 have an incredible opportunity to build the identity platform of the future,” he said. Eugenio Pace, CEO and co-founder of Auth0. “We founded Auth0 to enable product creators to innovate with a secure, easy-to-use, and extensible identity platform. Together, we can deliver workforce and customer identity solutions with exceptional speed, simplicity, security, reliability, and scalability. joining forces, we will accelerate innovation and our customers’ ability to meet the needs and demands of consumers, businesses and employees everywhere. ”
The Argentine unicorn Auth0 sold for $ 6.5 billion
From an investment of $ 50,000 to a sale of $ 6.5 billion
Some envisioned a future with flying cars, self-lacing sneakers, and perhaps time machines (just a dream). However, even in 2020 the most used passwords in the world continue to be ‘password’, ‘123456’ and ‘qwerty’.
However, there is a group of people who work every day from different cities around the world to build, precisely, a safer digital world and with fewer problems of this type. Last year, Auth0 joined the herd of unicorns premises that until now had four consolidated members with long experience in the ecosystem techie.
Far from the bombastic stories, Eugenio Pace Y Matias Woloski built their enterprise based on study, silent effort and a unglamorous multi-million dollar idea for the covers of newspapers and magazines.
“To speak specifically, we provide the famous ‘login box’, because any application that has some kind of value needs the user to be authenticated “, sums up Woloski, current Technology Manager (CTO) of the company founded in 2013.
To define it properly, Auth0 operates in the industry of identity-as-a-service (IDaaS), a business that, according to the firm itself, by 2025 could move more than $ 22 billion globally with a Increasing demand, particularly in the Asian market. Their product became the differential and the tip of the iceberg and then they invest in after-sales, more innovation and marketing.
Eugenio Pace and Matías Woloski, founders of Auth0
Identity as a service is not a very sexy thing to sell, but Silicon Valley investors think differently. In May 2019, the firm raised $ 103 million in a round led by the Sapphire Ventures fund. A) Yes, joined the select club that in the country integrate giants of the digital economy such as Mercado Libre, Despegar, Globant and OLX.
“I’m aiming for Auth0 to be a unicorn. At first, I saw it as difficult, even going public, but now I don’t see it as crazy,” Woloski said two years earlier.
The book that gave rise to the idea
Woloski I had studied to be Informatics Engineer on the Buenos Aires’ University, but his great skill was in the sale. This virtue had been born to, and partly inherited, from his father, who had a car parts store on Warnes Street.
It was his power of persuasion that led Microsoft to join the consulting firm Southworks, which he had founded with a colleague from the faculty, as a client. On the other side of the counter I was, nothing more and nothing less, that Eugenio Pace.
An electronic engineer from the Technological Institute of Buenos Aires (ITBA) and more than a decade older than his future partner, Pace, CEO of Auth0, he had built a long career at the giant founded by Bill Gates. After a brief stint as a developer at Banco Galicia, he joined Microsoft Consulting Services in 2000 and rose to become a product manager at that time.
“I started working with him on various projects and one of them, in 2008, was to write a book to solve the problem. authentication problem“recalls Woloski. The analog world brought them together to develop a project for the Microsoft Press publishing house. Were so many hours that they dedicated to him that, little by little, they realized that could be an interesting edge to develop as a business itself.
Pace even proposed it to one of his professors at The Founder Institute and he recognized that it was an idea with great potential, to bill billions. However, he stated that it was something difficult to translate into reality. Those interested can still get A guide to claims-based identity and Access control for $ 7 on Amazon.
After 13 years at Microsoft and as main lead program manager, operating from Washington, Pace resigned and decided to partner with Woloski to start the path of undertaking with a initial investment of u $ s50,000.
The business axis of the project, they thought, would be the programmer, who before had to implement a login by himself, a more than complex task. But the clients to whom they would sell their platform would not be these developers, but the ones who were really willing to shell out a fee monthly for the service: corporations.
“We don’t know everything”
It took several weeks for the customers started to arrive. The first contracted the firm’s license for $ 27 a month and the second landed thanks to the update of Pace’s LinkedIn profile.
The first months were not easy. As they did not generate sales volume, they had to finance themselves by offering consulting services. To this was added that, despite their trajectory, neither of them had experience leading a project from scratch. So they turned to an expert.
“We did something that helped us: hire a CEO. Having the ability to say ‘I don’t know everything’ it was key to get through that first year, “says Auth0’s chief technology officer.
They called Jon Gelsey, former Intel and HP. In recent years, he had served as Director of Corporate Development and in charge of the Strategy and Mergers and Acquisitions area of Microsoft. He sat in the main chair until December 2017 when Pace took over (he now runs Xnor.ai, dedicated to developing software for Artificial Intelligence).
Although they consider it an Argentine company, its headquarters are in Bellevue, Washington. Meanwhile, a large part of its structure is found throughout the globe, since of the 500 employees reported in July 2019 more than a half they worked from remotely.
“There are hackers who steal passwords from databases, there are lists published on the web. We prevent companies like Netflix from doing that,” says Woloski. And he adds: ” passwords are an old solution. We can give programmers a platform that can read more variables as the fingerprint or the face“.
Shortly after the operation, they had a juicy offer of US $ 2 million for the company, but both agreed that their goal was not to sell it and they moved on. To expand they appealed to private capital.
The first round came in 2014 with an injection of $ 2.4 million led by Bessemer Venture Partners, which returned for Series A of $ 6.8 million in June of the following year. To these was added a series B of US $ 16 million, a C of US $ 30 million and a D of US $ 55 million to total more than US $ 210 million in investments.
Asia, the new focus
Timing -Woloski points out- is one of the most important points for him success of an endeavor. In our case, “if we had done it four years earlier, it would not have had enough attraction. And if it had been two or three years later, someone else would have done it,” he explains.
The company currently has more than 9,000 clients and operates around 100 million logins per day. The co-founder reveals that for this year there are more than 200 open job vacancies Therefore, it expects to exceed 800 employees throughout 2020.
Their turnover is not information that both entrepreneurs usually share, but in 2017 they revealed that, if the objectives were met, last year they would have to have registered top sales to the u $ s100 million. The rule was based on T2D3: triple the revenue for two consecutive years and double the next three.
But this is not compared to what the company claims to save its customers. According to a study carried out by Forrester Research for Auth0, its platform allows, whoever implements it, to reduce up to US $ 11 million. The main saving variable is that of cutting costs for management, development and maintenance of identity.
The market that Woloski and Pace are targeting to continue expansion of new light blue and white unicorn It’s of Pacific Asia. To develop their presence in that territory, they inaugurated last December a Singapore office, the third in that block after Tokyo and Sydney.
For example, revenue from customers in Australia and New Zealand increased 256% year-on-year over the past year. In addition, they have work spaces in Buenos Aires and London.