Okta, the identity management software company, went public on the Nasdaq today, continuing a wave of tech IPOs. After pricing its IPO at $17, Okta raised $187 million by selling 11 million shares in the offering.
And the company was greeted with strong investor reception, closing up 38% at $23.51 on Friday. While it’s a good omen for its performance in the stock market, it also means the company could have sold its shares for more than $17 and raised more money.
But it was exciting for Okta to reach this milestone, with CEO Todd McKinnon saying that they see this moment as a “step on the journey.” McKinnon said that like with many startups, a lot of their employees took lower salaries because they believed their equity compensation would be worth something eventually. Some employees had been at the company for the full eight years and “they have to have a chance to sell that at some point.”
Okta closed the day with a market cap of $2.1 billion, above the $1.2 billion valuation that they had previously raised capital at. Venture capitalists poured about $230 million into the company.
Sequoia owned the largest stake prior to the IPO, with 21.2%. Andreessen Horowitz owned 19.6%, Greylock owned 16.9% and Khosla had a 8.1% stake.
The San Francisco-based company has built a big business in helping employees securely sign-in to applications on mobile or in the cloud. “Okta is the leading independent provider of identity for the enterprise,” reads the S-1 filing.
But it’s a competitive landscape and there are some giants in their space including Microsoft, IBM and Oracle. “We face intense competition, especially from larger, well-established companies, and we may lack sufficient financial or other resources to maintain or improve our competitive position,” warns the risk factors section of the filing.
Okta has managed to steadily grow its revenue, bringing in $160.3 million in the fiscal year ending in January. This compares to $85.9 million in the same period last year and $41 million the year before.
However, losses are widening, with the company in the red for $83.5 million in its latest year. This compares to prior losses of $76.3 million and $59.1 million in the years prior.
Okta is the fifth venture-backed IPO in recent weeks. Snap opened up the “window” and then MuleSoft, Alteryx and Elevate Credit followed suit. Yext is expected to debut next week.
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