Khosla, Greylock, Andreessen Horowitz Put $16.5M In Enterprise Cloud App Management Startup Okta

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Enterprise cloud app management company Okta has raised $16.5 million in Series B funding from Greylock Partners, Khosla Ventures, Andreessen Horowitz and FLOODGATE. This brings the company’s total funding to $28 million.

Okta is a cloud application management service. Okta’s platform allows companies to have control of their users, applications, and data both in the cloud and behind the firewall. The startup was founded by Todd McKinnon, the former VP of Engineering of the most successful cloud-based company to-date, Salesforce.

As McKinnon tells us, Okta is providing a platform for companies to manage corporate IT. He explains that traditional security and management platforms aren’t going to work with the cloud. When moving to the cloud, IT admins face the challenge of securing and controlling users and access, simplifying the adoption and scaling of these applications, and at the same time making sure that the business is optimizing its applications in the cloud.

Companies who are using cloud-based applications like Salesforce and Google Apps need an identity and directory service in the cloud as a place where they can store user profiles and more. Okta gives IT managers the ability to maintain one central directory and replicate this to all cloud applications.

The company launched the product to public in Janaury. McKinnon says that he originally thought customers would be small to medium businesses, but has recently seen a uptake in large companies using Okta. Companies using Okta include Enterasys Networks, Pandora, T.D.Williamson, AMAG Pharmaceuticals and others. The company says the use of Okta’s on-demand service has ramped up dramatically to power over 1 million authentications per month.

And McKinnon envisions a larger empire of cloud IT management services that ‘empower businesses to eliminate cloud adoption barriers.’

Ben Horowitz, who led the company’s Series A round, has said of Okta: Okta’s initial product aims to solve the Cloud identity problem. I like the problem, because it is seriously different in the cloud than it is on-premise and, for new companies, different equals good. He belivees that the market opportunity is huge “because the cloud identity market will likely become the cloud management market. Given that those current markets combined are between $10B and $20B (depending on what you count), the resulting market will be extremely large.”

The new funds will be used for sales and marketing efforts, as well as for ramping up distribution. As part of this transaction, David Weiden of Khosla Ventures will become a board advisor, and Aneel Bhusri, co-founder and co-CEO of Workday, will join the Okta Board of Directors.