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Thoma Bravo buys majority stake in Apttus in unexpected ending
Apttus, a quote-to-cash vendor built on top of the Salesforce platform that looked to be heading toward an IPO in recent years has taken a different tack, instead being acquired by private equity firm Thoma Bravo today.
The company did not reveal the purchase price, but said it could be ready to share more details about the arrangement after the deal closes, probably next month. “What we can say is that Apttus views this development positively and believes Thoma Bravo can instill greater operational excellence, strengthen our market leadership and allow us to continue providing indispensable value to our customers,” a company spokesperson told TechCrunch.
They are describing this not as a full on acquisition, but as ‘taking a majority stake’. However you describe it, it probably wasn’t the ending the company envisioned after taking $404 million in investment since launching in 2006, one of the earliest startups to build a business on top of the Salesforce platform.
If the company believed that Salesforce would eventually buy it, that never happened. In fact, that dream probably went out the window when Salesforce bought SteelBrick, a similar company also built on Salesforce, at the end of 2015 for $360 million.
In spite of this, in an interview in 2016, CEO Kirk Krappe still was confident that an exit was coming, either by IPO or a possibly a Salesforce acquisition.
“We will be IPOing this year. That may be a function to figure what Salesforce wants to do and they may think about that [after purchasing SteelBrick at the end of last year]. There’s no reason they can’t buy us too. For me, I have to run the business, and we’re growing 100 percent year on year. If Salesforce came to the table, that would be great if the numbers work. If not, we have an amazingly strong business,” he said at the time.
That never came to pass of course, and the company tried to separate itself from Salesforce in April of 2016 when it released a version of Apttus that would work on Microsoft Dynamics. Krappe saw this as a way to show investors he wasn’t completely married to the Salesforce platform.
While Salesforce provided a system of record around the customer information and all that involved, once the salesperson actually closed in on a sale, that’s when software like Apttus came into play, allowing the company to generate a detailed proposal, a contract once the deal was agreed upon and finally collecting and recording the money from the sale.
Apttus took its last funding rounds in Sept 2017 for $55 million and later a debt financing round for another $75 million in February this year, according to data on Crunchbase.
Thoma Bravo has bought a number of enterprise software products over the years including Qlik, Sailpoint, Dynatrace, Solar Winds and others. Apttus should fit in well with that family of companies.
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VMware acquires CloudHealth Technologies for multi-cloud management
VMware is hosting its VMworld customer conference in Las Vegas this week, and to get things going it announced that it’s acquiring Boston-based CloudHealth Technologies. They did not disclose the terms of the deal, but Reuters is reporting the price is $500 million.
CloudHealth provides VMware with a crucial multi-cloud management platform that works across AWS, Microsoft Azure and Google Cloud Platform, giving customers a way to manage cloud cost, usage, security and performance from a single interface.
Although AWS leads the cloud market by a large margin, it is a vast and growing market and most companies are not putting their eggs in a single vendor basket. Instead, they are looking at best of breed options for different cloud services.
This multi-cloud approach is great for customers in that they are not tied down to any single provider, but it does create a management headache as a consequence. CloudHealth gives multi-cloud users a way to manage their environment from a single tool.
CloudHealth multi-cloud management. Photo: CloudHealth Technologies
VMware’s chief operating officer for products and cloud services, Raghu Raghuram, says CloudHealth solves the multi-cloud operational dilemma. “With the addition of CloudHealth Technologies we are delivering a consistent and actionable view into cost and resource management, security and performance for applications across multiple clouds,” Raghuram said in a statement.
CloudHealth began offering support for Google Cloud Platform just last month. CTO Joe Kinsella told TechCrunch why they had decided to expand their platform to include GCP support: “I think a lot of the initiatives that have been driven since Diane Greene joined Google [at the end of 2015] and began really driving towards the enterprise are bearing fruit. And as a result, we’re starting to see a really substantial uptick in interest.”
It also gave them a complete solution for managing across the three of the biggest cloud vendors. That last piece very likely made them an even more attractive target for a company like VMware, who apparently was looking for a solution to buy that would help customers manage across a hybrid and multi-cloud environment.
The company had been planning future expansion to manage not just the public cloud, but also private clouds and data centers from one place, a strategy that should fit well with what VMware has been trying to do in recent years to help companies manage a hybrid environment, regardless of where their virtual machines live.
With CloudHealth, VMware not only gets the multi-cloud management solution, it gains its 3000 customers which include Yelp, Dow Jones, Zendesk and Pinterest.
CloudHealth was founded in 2012 and has raised over $87 million. Its most recent round was a $46 million Series D in June 2017 led by Kleiner Perkins. Other lead investors across earlier rounds have included Sapphire Ventures, Scale Venture Partners and .406 Ventures.
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Mail digitizing service Earth Class Mail acquires receipt digitizing service Shoeboxed
Earth Class Mail, a company that digitizes your physical mail so you don’t have to go to the mailbox every day, today announced that it has acquired receipt scanning and expense tracking service Shoeboxed.
The reason Earth Class Mail would be interested in Shoeboxed is pretty obvious, given that both companies focus on taking the pain out of dealing with paper. Both services will continue to operate as usual, though we’ll likely see some deep integrations between the two over time.
Shoeboxed, which launched 11 years ago, currently digitizes over five million documents per year for its more than 1 million customers in 90 countries. Its main market is small businesses in the U.S., which make up 500,000 of its users.
“When we started in 2008 and put the first iPhone app in the app store to scan receipts, there was one other powerhouse around helping small business go digital — Earth Class Mail,” the company’s CEO and co-founder Tobias Walter tells us. “The combined power of our two companies will be a massive shift for small businesses to finally become paperless and say goodbye to old workflows that cost them hours of their productivity. I could not be happier with the new home we found for the company, the team and our customers!”
What sets Earth Class Mail apart from the United States Postal Service’s Informed Delivery service is that it not only scans the outside of the envelopes that you are about to receive but that you can also give the company permission to scan all the documents inside, too (and the price you pay for the service depends mostly on how many of these full scans you want per month). While Oregon-based Earth Class Mail had to file for bankruptcy protection in 2015, its new leadership team turned the company around. The company says that its annual run rate is now $10 million, up 20 percent since Jess Garza become its new CEO last December.
Walter also notes that users would occasionally send unopened envelopes, too, but the company wasn’t allowed to open them. These customers can now easily become Earth Class Mail users.
Over the course of its existence, Shoeboxed only raised a moderate amount of funding, with a $580,000 Series A round led by Novak Biddle Venture Partners in 2008 (when Series A rounds were still much smaller than today) and a $1.4 million Series B round in 2011. The financial details of today’s acquisition were not disclosed.
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Cisco’s $2.35 billion Duo acquisition front and center at earnings call
When Cisco bought Ann Arbor, Michigan security company, Duo for a whopping $2.35 billion earlier this month, it showed the growing value of security and security startups in the view of traditional tech companies like Cisco.
In yesterday’s earnings report, even before the ink had dried on the Duo acquisition contract, Cisco was reporting that its security business grew 12 percent year over year to $627 million. Given those numbers, the acquisition was top of mind in CEO Chuck Robbins’ comments to analysts.
“We recently announced our intent to acquire Duo Security to extend our intent-based networking portfolio into multi- cloud environments. Duo’s SaaS delivered solution will expand our cloud security capabilities to help enable any user on any device to securely connect to any application on any network,” he told analysts.
Indeed, security is going to continue to take center stage moving forward. “Security continues to be our customers number one concern and it is a top priority for us. Our strategy is to simplify and increase security efficacy through an architectural approach with products that work together and share analytics and actionable threat intelligence,” Robbins said.
That fits neatly with the Duo acquisition, whose guiding philosophy has been to simplify security. It is perhaps best known for its two-factor authentication tool. Often companies send a text with a code number to your phone after you change a password to prove it’s you, but even that method has proven vulnerable to attack.
What Duo does is send a message through its app to your phone asking if you are trying to sign on. You can approve if it’s you or deny if it’s not, and if you can’t get the message for some reason you can call instead to get approval. It can also verify the health of the app before granting access to a user. It’s a fairly painless and secure way to implement two-factor authentication, while making sure employees keep their software up-to-date.
Duo Approve/Deny tool in action on smartphone.
While Cisco’s security revenue accounted for a fraction of the company’s overall $12.8 billion for the quarter, the company clearly sees security as an area that could continue to grow.
Cisco hasn’t been shy about using its substantial cash holdings to expand in areas like security beyond pure networking hardware to provide a more diverse recurring revenue stream. The company currently has over $54 billion in cash on hand, according to Y Charts.
Cisco spent a fair amount money on Duo, which according to reports has $100 million in annual recurring revenue, a number that is expected to continue to grow substantially. It had raised over $121 million in venture investment since inception. In its last funding round in September 2017, the company raised $70 million on a valuation of $1.19 billion.
The acquisition price ended up more than doubling that valuation. That could be because it’s a security company with recurring revenue, and Cisco clearly wanted it badly as another piece in its security solutions portfolio, one it hopes can help keep pushing that security revenue needle ever higher.
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Coinbase acquires Distributed Systems to build ‘Login with Coinbase’
Coinbase wants to be Facebook Connect for crypto. The blockchain giant plans to develop “Login with Coinbase” or a similar identity platform for decentralized app developers to make it much easier for users to sign up and connect their crypto wallets. To fuel that platform, today Coinbase announced it has acquired Distributed Systems, a startup founded in 2015 that was building an identity standard for dApps called the Clear Protocol.
The five-person Distributed Systems team and its technology will join Coinbase. Three of the team members will work with Coinbase’s Toshi decentralized mobile browser team, while CEO Nikhil Srinivasan and his co-founder Alex Kern are forming the new decentralized identity team that will work on the Login with Coinbase product. They’ll be building it atop the “know your customer” anti-money laundering data Coinbase has on its 20 million customers. Srinivasan tells me the goal is to figure out “How can we allow that really rich identity data to enable a new class of applications?”
Distributed Systems had raised a $1.7 million seed round last year led by Floodgate and was considering raising a $4 million to $8 million round this summer. But Srinivasan says, “No one really understood what we’re building,” and it wanted a partner with KYC data. It began talking to Coinbase Ventures about an investment, but after they saw Distributed Systems’ progress and vision, “they quickly tried to move to find a way to acquire us.”
Distributed Systems began to hold acquisition talks with multiple major players in the blockchain space, and the CEO tells me it was deciding between going to “Facebook, or Robinhood, or Binance, or Coinbase,” having been in formal talks with at least one of the first three. Of Coinbase the CEO said, they “were able to convince us they were making big bets, weaving identity across their products.” The financial terms of the deal weren’t disclosed.
Coinbase’s plan to roll out the Login with Coinbase-style platform is an SDK that others apps could integrate, though that won’t necessarily be the feature’s name. That mimics the way Facebook colonized the web with its SDK and login buttons that splashed its brand in front of tons of new and existing users. This turned Facebook into a fundamental identity utility beyond its social network.
Developers eager to improve conversions on their signup flow could turn to Coinbase instead of requiring users to set up whole new accounts and deal with crypto-specific headaches of complicated keys and procedures for connecting their wallet to make payments. One prominent dApp developer told me yesterday that forcing users to set up the MetaMask browser extension for identity was the part of their signup flow where they’re losing the most people.
This morning Coinbase CEO Brian Armstrong confirmed these plans to work on an identity SDK. When Coinbase investor Garry Tan of Initialized Capital wrote that “The main issue preventing dApp adoption is lack of native SDK so you can just download a mobile app and a clean fiat to crypto in one clean UX. Still have to download a browser plugin and transfer Eth to Metamask for now Too much friction,” Armstrong replied “On it :)”
On it 🙂
— Brian Armstrong (@brian_armstrong) August 15, 2018
In effect, Coinbase and Distributed Systems could build a safer version of identity than we get offline. As soon as you give your Social Security number to someone or it gets stolen, it can be used anywhere without your consent, and that leads to identity theft. Coinbase wants to build a vision of identity where you can connect to decentralized apps while retaining control. “Decentralized identity will let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity,” writes Coinbase’s PM for identity B. Byrne, who’ll oversee Srinivasan’s new decentralized identity team. “If you stretch your imagination a little further, you can imagine this applying to your photos, social media posts, and maybe one day your passport too.”
Considering Distributed Systems and Coinbase are following the Facebook playbook, they may soon have competition from the social network. It’s spun up its own blockchain team and an identity and single sign-on platform for dApps is one of the products I think Facebook is most likely to build. But given Coinbase’s strong reputation in the blockchain industry and its massive head start in terms of registered crypto users, today’s acquisition well position it to be how we connect our offline identity with the rising decentralized economy.
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Facebook buys Vidpresso’s team and tech to make video interactive
Zombie-like passive consumption of static video is both unhealthy for viewers and undifferentiated for the tech giants that power it. That’s set Facebook on a mission to make video interactive, full of conversation with broadcasters and fellow viewers. It’s racing against Twitch, YouTube, Twitter and Snapchat to become where people watch together and don’t feel like asocial slugs afterward.
That’s why Facebook today told TechCrunch that it’s acqui-hired Vidpresso, buying its seven-person team and its technology but not the company itself. The six-year-old Utah startup works with TV broadcasters and content publishers to make their online videos more interactive with on-screen social media polling and comments, graphics and live broadcasting integrated with Facebook, YouTube, Periscope and more. The goal appears to be to equip independent social media creators with the same tools these traditional outlets use so they can make authentic but polished video for the Facebook platform.
Financial terms of the deal weren’t disclosed, but it wouldn’t have taken a huge price for the deal to be a success for the startup. Vidpresso had only raised a $120,00 in seed capital from Y Combinator in 2014, plus some angel funding. By 2016, it was telling hiring prospects that it was profitable, but also that, “We will not be selling the company unless some insane whatsapp like thing happened. We’re building a forever biz, not a flip.” So either Vidpresso lowered its bar for an exit or Facebook made coming aboard worth its while.
For now, Vidpresso clients and partners like KTXL, Univision, BuzzFeed, Turner Sports, Nasdaq, TED, NBC and others will continue to be able to use its services. A Facebook spokesperson confirmed that customers will work with the Vidpresso team at Facebook, who are joining its offices in Menlo Park, London and LA. That means Facebook is at least temporarily becoming a provider of enterprise video services. But Facebook confirms it won’t charge Vidpresso clients, so they’ll be getting its services for free from now on. Whether Facebook eventually turns away old clients or stops integrating with competing video platforms like Twitch and YouTube remains to be seen. For now, it’s giving Vidpresso a much more dignified end than the sudden shutdowns some tech giants impose on their acquisitions.
“We’ve had a lot of false starts along the way . . . We finally landed on helping create high quality broadcasts back on social media, but we still haven’t realized the full vision yet. That’s why we’re joining Facebook,” the Vidpresso team writes. “This gives us the best opportunity to accelerate our vision and offer a simple way for creators, publishers, and broadcasters to use social media in live video at a high quality level . . . By joining Facebook, we’ll be able to offer our tools to a much broader audience than just our A-list publishing partners. Eventually, it’ll allow us to put these tools in the hands of creators, so they can focus on their content, and have it look great, without spending lots of time or money to do so.”
Facebook Live has seen 3.5 billion broadcasts to date, and they get six times as many interactions as traditional videos. But beyond public figures, game streamers, and the odd moment of citizen journalism, it’s become clear that most users don’t have compelling enough content to stream. Interactivity could take some pressure off the broadcaster by letting the audience chip in.
Facebook already has some interactive video experiments out in the wild. For users, it recently rolled out its Watch Party tool for letting Groups view and chat about videos together. It’s also trying new games like Lip Sync Live and a Talent Show feature where users submit videos of them singing. For creators, Facebook now let streamers earn tips with its new Stars virtual currency, and lets fans subscribe to donating money to their favorite video makers like on Patreon. And on the publisher side, Facebook Live has also built tools to help publishers pull in social media content. It’s even got an interactive video API that it’s developing to allow developers to launch their own HQ Trivia-game shows.
But the last line of Vidpresso’s announcement above explains Facebook’s intentions here, and also why it didn’t just try to build the tools itself. It doesn’t just want established news publishers and TV studios making video for its platform. It wants semi-pro creators to be able to broadcast snazzy videos with graphics, comments and polls that can aesthetically compete with “big video” but that feel more natural. This focus on creators over news outlets aligns with reports of Facebooks head of journalist relations Campbell Brown allegedly saying that Mark Zuckerberg doesn’t care about publishers and that “We are not interested in talking to you about your traffic and referrals any more. That is the old world and there is no going back.” Facebook has contested these reports.
Every internet platform is wising up to the fact that web-native creators who grew up on their sites often create the most compelling content and the most fervent fan bases. Whichever video hub offers the best audience growth, creative expression tools and monetization options will become the preferred destination for creators’ work, and their audiences will follow. Vidpresso could help these creators look more like TV anchors than selfie monologuers, but also help them earn money by integrating brand graphics and tie-ins. Facebook couldn’t risk another tech giant buying up Vidpresso and gaining an edge, or wasting time trying to build interactive video technology and expertise from scratch.
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Patreon buys Memberful but keeps it indie as patronage consolidates
Patreon is forming a patronage empire. Today it acquired white-labeled subscription membership platform Memberful, which lets creators sell exclusive access to content through their own site instead of a centralized platform like Patreon. Rather than being folded into a Patreon feature, Memberful will run as an independent brand, maintaining its tiered pricing structure, though new sign-ups will get a rate closer to Patreon’s low 5 percent rake.
Terms weren’t disclosed for the deal that brings Memberful’s whole seven-person team and 500 paying clients aboard. But Patreon clearly sees rolling up competitors and complements in the patronage space as a worthy use of its $60 million raise at a $450 million valuation late last year that brought it to $105 million in funding. In June, Patreon bought Kit to let creators bundle in merchandise with their perks for paying monthly subscribers. It also bought out competitor Subbable back in 2015.
By teaming up, Patreon and Memberful will be able to provide subscription patronage services for creators, whether they want their fan community to live on Patreon, or through Memberful on their own WordPress or website with integrations of Stripe and MailChimp. Patreon already has 2 million patrons paying an average of $12 each to a total of 100,000 creators, and it expects to pay out $300 million in 2018 alone. The acquisition could let Patreon move up market, recruiting comedians, illustrators, game developers and vloggers that already have an established audience elsewhere.
“I think membership is on the up and is going to grow for the next decade,” says Patreon VP of Product Wyatt Jenkins. “Our strategy is to be an open, neutral platform,” as opposed to focusing on one type of content like YouTube with videos or Twitch with streaming where you’re locked into that platform’s tools. Memberful, launched in 2013, has bootstrapped the creation of its white-labeled tools without the need for venture funding.
Memberful gives creators like Stratechery’s Ben Thompson (who has an interview with Patreon CEO Jack Conte about the acquisition) and podcast producer Gimlet Media full control over branding, with no Patreon chrome. But it’s more expensive and also requires more work as creators have to manage their own site, customer service and payment processing. Memberful takes a 10 percent cut with no monthly fee for its limited basic tier, or $25 per month plus 4.9 percent for the full-featured pro version, though it also offers enterprise pricing. That pricing will remain for existing users, but “new customers will see a transaction fee closer to Patreon’s,” which is a flat 5 percent, a Patreon spokesperson tells me. Patreon does basically everything for a creator, but it also ropes them into the Patreon-branded ecosystem that also promotes other content makers.
Sometimes Patreon handling everything can be a problem, though. Last week it experienced a higher-than-normal volume of declines from banks of charges to patrons. That left some creators without their expected income, and required patrons to deal with the chore of calling their bank to tell them paying $1, $5 or $20 per month to their favorite creator wasn’t fraud. Patreon now tells me that “as of Friday, we let everyone know that we were back to normal decline rates, and were going to continue retrying the rest of the cards like we normally do.”
It makes sense for Patreon to race to consolidate the patronage industry as it’s being invaded by giant incumbents. Twitch, YouTube and Facebook all offer their own versions of paid subscriptions to creators that get patrons extra perks like exclusive content or badges so they stick out in chat rooms full of fans. While those platforms are all focused on video streamers, they still pose a threat to Patreon, which needs to maximize the number of successful creators it hosts in order to earn enough from its tiny cut of payments. Facebook especially could muscle in, as many creators already run their own Facebook Pages.
Asked about competition from those platforms, Jenkins said, “I think there’s a strong chance it’s a tailwind. The concept of membership is pretty new. If those big companies are going to drop millions of dollars into marketing the concept of membership I think that’s great.” He stressed the question of “Do you want to own your fan base? On YouTube, those aren’t your fans, they’re YouTube users. YouTube is incentivized to keep them watching videos so it can show ads.”
That might lead fans to unsubscribe from a creator as YouTube promotes other similar ones they could watch instead. “You don’t own the relationship.” Facebook Page admins have found that out the hard way as algorithm changes prioritize friends over public figures, making it tough to reach the followers they spent years begging to like them. If Patreon can offer creators audience growth through discovery on its interconnected network without cannibalizing anyone’s member counts, its neutrality and focus could make it a leader in this new wing of the digital economy.
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Arm acquires data management service Treasure Data to bolster its IoT platform
Arm, the semiconductor firm you probably still remember as ARM, today announced that it has acquired Treasure Data, a data management platform for large enterprise customers. The companies didn’t announce the financial details of the transaction, but earlier reporting by Bloomberg pegged the price at $600 million.
This move strengthens Arm’s IoT nascent play, given that Treasure Data’s specialty is dealing with the large streams of data that these systems produce (as well as data from CRM, e-commerce systems and other third-party services).
This move follows Arm’s recent acquisition of Stream and indeed, the company calls the acquisition of Treasure Data “the final piece” of its “IoT enablement puzzle.” The result of this completed puzzle is the Arm Pelion IoT Platform, which combines Stream, Treasure Data and the existing Arm Mbed Cloud into a single solution for connecting and managing IoT devices and the data they produce.
Arm says Treasure Data will continue to operate as before and continue to serve new clients as well as its existing users. “It will remain an important part of industry IoT enablement, providing the ability to harness new, complex edge and device data within a comprehensive customer profile to personalize their products and improve their experiences,” the company says.
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Facebook acquires Redkix to enhance communications on Workplace by Facebook
Facebook had a rough day yesterday when its stock plunged after a poor earnings report. What better way to pick yourself up and dust yourself off than to buy a little something for yourself. Today the company announced it has acquired Redkix, a startup that provides tools to communicate more effectively by combining email with a more formal collaboration tool. The companies did not reveal the acquisition price.
Redkix burst out of the gate two years ago with a $17 million seed round, a hefty seed amount by any measure. What prompted this kind of investment was a tool that combined a collaboration tool like Slack or Workplace by Facebook with email. People could collaborate in Redkix itself, or if you weren’t a registered user, you could still participate by email, providing a more seamless way to work together.
Alan Lepofsky, who covers enterprise collaboration at Constellation Research, sees this tool as providing a key missing link. “Redkix is a great solution for bridging the worlds between traditional email messaging and more modern conversational messaging. Not all enterprises are ready to simply switch from one to the other, and Redkix allows for users to work in whichever method they want, seamlessly communicating with the other,” Lepofsky told TechCrunch.
As is often the case with these kinds of acquisitions, the company bought the technology itself along with the team that created it. This means that the Redkix team including the CEO and CTO will join Facebook and they will very likely be shutting down the application after the acquisition is finalized.
Lepofsky thinks that enterprises that are adopting Facebook’s enterprise tool will be able to more seamlessly transition between the two modes of communication, the Workplace by Facebook tool and email, as they prefer.
Although a deal like this has probably been in the works for some time, after yesterday’s earning’s debacle, Facebook could be looking for ways to enhance its revenue in areas beyond the core Facebook platform. The enterprise collaboration tool does offer a possible way to do that in the future, and if they can find a way to incorporate email into it, it could make it a more attractive and broader offering.
Facebook is competing with Slack, the darling of this space and others like Microsoft, Cisco and Google around communications and collaboration. When it launched in 2015, it was trying to take that core Facebook product and put it in a business context, something Slack had been doing since the beginning.
To succeed in business, Facebook had to think differently than as a consumer tool, driven by advertising revenue and had to convince large organizations that they understood their requirements. Today, Facebook claims 30,000 organizations are using the tool and over time they have built in integrations to other key enterprise products, and keep enhancing it.
Perhaps with today’s acquisition, they can offer a more flexible way to interact with the platform and could increase those numbers over time.
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Okta nabs ScaleFT to build out ‘Zero Trust’ security framework
Okta, the cloud identity management company, announced today it has purchased a startup called ScaleFT to bring the Zero Trust concept to the Okta platform. Terms of the deal were not disclosed.
While Zero Trust isn’t exactly new to a cloud identity management company like Okta, acquiring ScaleFT gives them a solid cloud-based Zero Trust foundation on which to continue to develop the concept internally.
“To help our customers increase security while also meeting the demands of the modern workforce, we’re acquiring ScaleFT to further our contextual access management vision — and ensure the right people get access to the right resources for the shortest amount of time,” Okta co-founder and COO Frederic Kerrest said in a statement.
Zero Trust is a security framework that acknowledges work no longer happens behind the friendly confines of a firewall. In the old days before mobile and cloud, you could be pretty certain that anyone on your corporate network had the authority to be there, but as we have moved into a mobile world, it’s no longer a simple matter to defend a perimeter when there is effectively no such thing. Zero Trust means what it says: you can’t trust anyone on your systems and have to provide an appropriate security posture.
The idea was pioneered by Google’s “BeyondCorp” principals and the founders of ScaleFT are adherents to this idea. According to Okta, “ScaleFT developed a cloud-native Zero Trust access management solution that makes it easier to secure access to company resources without the need for a traditional VPN.”
Okta wants to incorporate the ScaleFT team and, well, scale their solution for large enterprise customers interested in developing this concept, according to a company blog post by Kerrest.
“Together, we’ll work to bring Zero Trust to the enterprise by providing organizations with a framework to protect sensitive data, without compromising on experience. Okta and ScaleFT will deliver next-generation continuous authentication capabilities to secure server access — from cloud to ground,” Kerrest wrote in the blog post.
ScaleFT CEO and co-founder Jason Luce will manage the transition between the two companies, while CTO and co-founder Paul Querna will lead strategy and execution of Okta’s Zero Trust architecture. CSO Marc Rogers will take on the role of Okta’s Executive Director, Cybersecurity Strategy.
The acquisition allows the Okta to move beyond purely managing identity into broader cyber security, at least conceptually. Certainly Roger’s new role suggests the company could have other ideas to expand further into general cyber security beyond Zero Trust.
ScaleFT was founded in 2015 and has raised $2.8 million over two seed rounds, according to Crunchbase data.
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