Photo: Auth0/Courtesy

Auth0: the Argentinian sauce from the US cybersecurity giant Okta

Even with the acquisition, the startup continues as a product unit within Okta and maintains standalone product and customer service operations

Ler em portuguêsLeer en español

In May this year, Argentine cybersecurity unicorn auth0 was acquired by US giant Okta for $6.5 billion. With the exit by acquisition, the startup reached a valuation that technology companies in the South American country had not seen since Mercado Libre, Globant, and Despegar.

In September, Okta reported total revenue of $316 million, up 57% year over year. Auth0’s subscription revenue was $38 million. Even with the acquisition, the startup remains a product unit within Okta and maintains product and customer service operations separately, as Cassio Sampaio, vice president of product at Auth0, told LABS.

Cassio Sampaio, VP of product at Auth0. Photo: Courtesy/Auth0

“The companies have similar products that come to market quite differently. Auth0 has always built products that had a lot of appeal with the software developer, for when a company was modernizing an existing application and was looking for a way to integrate with identity,” he explains.

While Auth0 serves startups like Rappi and Loft, as well as companies that were born digital like XP Investimentos, Okta has a strong presence in cybersecurity for corporate environments and large enterprises.

READ ALSO: Investments made by Argentina’s NXTP Ventures, a pioneer in LatAm venture capital, start to pay off as the ecosystem evolves

Auth0 was founded in Washington but has Argentinean DNA by the two founders: Eugenio Pace and Matías Woloski. “The company has always had a very strong link with Argentina initially and then with the rest of Latin America. But fundamentally Auth0 has always served a large number of clients in the United States,” commented Sampaio.

Even so, over 40% of Auth0’s revenues come from outside the United States, which is not usual for technology companies, as the executive pointed out since most of them have revenues concentrated in the North American country. Auth0’s differential is precisely the large clients that the company has conquered in Brazil.

The company operates identity as a service, that is, it takes care of every need an application has to identify who is the user behind the login and process any other authentication factor. Authentication operations in Localiza and XP applications, such as biometrics and facial identification, or SMS to enter code, for example, are authentication and security validation transactions made by Auth0.

Auth0 has recently launched a support channel on Microsoft‘s cloud platform, Azure, and announced a solution for the identity for B2B SaaS companies to integrate and make the solution available to all customers, rather than a customer-specific solution.

READ ALSO: Latin America’s new unicorn: Ualá raises $350 million from SoftBank and Tencent

“A SaaS application that has thousands of customers has this problem that for each of those enterprise customers that the company has, it needs an identity solution. If it sets up a solution for each of those customers, it costs a fortune in terms of time and investment.”

Expanding Okta’s presence in Latin America

“Auth0’s presence is already quite large in Latin America and the idea is to use some of that base that already exists from Auth0 to bring Okta closer to the region,” said Sampaio, as Auth0’s platform is “100% localizable”, with account setup and login boxes in Portuguese and Spanish. Auth0 now has more than 100 people in its Buenos Aires office.

In a recent global Auth0 survey, which heard 17,000 professionals and decision-makers in 12 countries, Sampaio explains that it was possible to see the contrast between the expectation and reality of clients in the United States and Latin America, particularly Brazil and Argentina.

“We noticed that customers in Latin America feel less satisfied than in the North American market. There were more than a thousand end-users surveyed in the region, around 200 IT and marketing professionals who are building these applications, mainly in Brazil, Argentina, and Mexico“, he said.

READ ALSO: Alaya Capital presents a new $80 million fund to help local leaders in Spanish-speaking Latin America regionalize their footprint

According to the survey, 87% of consumers in the region abandoned some purchase process in Brazil with a higher degree of dissatisfaction trying to finish the login process, against 85% in Mexico and 80% in Argentina. In the region, the clients that reported greater interest in using social login, that is, identification with Facebook, for example, was 61%, against 42% in the Asia Pacific and 31% in Europe, “much because of how prevalent social networks are in Latin America“, recalled the VP.

Although IT/Marketing decision-makers in Latin America are the most likely to say they offer authentication solutions (with Latin America accounting for 54% compared to APAC 45%, EMEA 45%, and US 39%), companies across the region are falling short of consumer expectations for all login technologies, according to Auth0’s research.

“About 87% of consumers reuse passwords across multiple sites, which is one of the biggest problems for security on the authentication side because every day we have a lot of data leaks. It only takes one password leak for someone to use techniques and access other accounts and platforms. That’s exactly the value of a product like Auth0, a customer that has Auth0 should try to recommend to their end-users not to create a password directly, but to use social login, or if the customer is going to use a password, to have an additional authentication,” he said.

There is a deficit between Brazilian customer expectation – where 62% of consumers would like to have two-factor authentication – versus what is offered by companies in the country. According to Auth0, less than 23% of Brazilian companies offer some form of authentication.

“If you go back four, five years ago, the consumer on the internet, in general, was not so aware of the risk that existed with the password. It’s just that the number of leaks got so impressive in the last period that the consumer has already understood that they need stricter password management. Most companies are slow to react to that, which creates this trust problem between the consumer and the company, and is a huge barrier to the digitization of services. It goes from the government trying to offer services online, to much smaller companies trying to process a purchase order, for example.”