According to a MarketsandMarkets report, the Identity and Access Management (IAM) market is estimated to grow 15% annually over the period 2014 through 2019 to be worth $18.30 billion in 2019. North America is expected to be the biggest market in terms of revenue contribution but emerging economies of Asia-Pacific (APAC) and Middle East and Africa (MEA) are expected to deliver higher growth rates during the coming years.
Salesforce.com veterans Todd McKinnon and Frederic Kerrest set up Okta in 2008. The company initially began with the intention of assisting companies with reliability of services and SLA compliance. But based on customer feedback, the company pivoted to deliver a product that would focus on identity management.
Today, Okta offers an integrated identity management and mobility management service that grants people access to applications on any device at any time, while ensuring that security parameters are met. Their platform connects companies with their customers, partners, and employees. It has more than 2,700 customers so far and the list includes names like Chiquita Brands, LinkedIn, MGM Resorts, and SAP. Its platform connects to multiple applications and services including Amazon, Box, Dropbox, Oracle, DocuSign, and Workday.
Okta does not disclose its financials. It earns revenues on a subscription-based model for the products. Prices range from $1 per user per month for access to the Universal Directory to $4 per user per month for premium products that include mobility management along with the basic features of user store, reporting, IP range and per app policies, and support for third-party second factor authentication. It also charges a fee for access to the platform and for other professional services that may be required by the customer.
It has been venture funded so far with $230 million from investors including Altimeter Capital, Janus Capital Group, Khosla Ventures, Greylock Partners, Andreessen Horowitz, Sequoia Capital, FLOODGATE, SV Angel, Maynard Webb, Dharmesh Shah, Stephen Marcus, Avid Larizadeh, Ed Roberts, Tom Berson, and Jacques & Sandra Kerrest. Its last round of funding was held in September 2015 when it raised $75 million at a valuation of $1.2 billion. Prior to that round, funding was held in June 2014 that valued them at $600 million. Okta is expected to be preparing for an IPO this summer. It appears to have begun talks with banks to choose lead underwriters for the IPO.
Valuation apart, we await revenue, growth and profitability metrics as the company makes them available to assess the company’s post IPO prospects.
To drive growth, Okta is investing in market expansion in other geographies and product development. Earlier this month Okta announced that it was pursuing authorization with the Federal Risk and Authorization Management Program (FedRAMP). The FedRAMP is a government-wide, standardized approach to security assessment, authorization, and continuous auditing for federal agencies. The certification will enable government agencies to adopt Okta’s identity, mobility, and security solutions. It has already obtained ISO 27001 certification for its information security management system and is the first and only identity-as-a-service company to achieve the Cloud Security Alliance (CSA) Security, Trust, & Assurance Registry (STAR) Level 2 Attestation. Recently, Okta also added social security to its services. Its platform now allows developers to register, authenticate, and manage users from social identity providers like Facebook, Google, and LinkedIn.
As part of its regional expansion initiatives, Okta announced its presence in the Nordics with the opening of its third office in Europe. It has also opened a new data center in Europe to comply with the EU data privacy laws.
Okta hopes that its recent moves will help thwart competition coming from giants like Salesforce.com which offers Salesforce Identity, Microsoft which released the Microsoft Identity Manager in August 2015, and IBM. Other smaller companies, some newly listed, are also offering similar products. CyberArk, Ping Identity and Centrify are some who are all shooting for a share of the same market.
This segment is a part in the series : 2016 IPO Prospects