Auth0 Sells For $6.5 Billion: The Power of “Nerdy and Early” Investing

In June 2014, while at Bessemer, I had the privilege of partnering with Jon Gelsey, Eugenio Pace, and Matias Woloski by leading the first $2 million seed round of financing in Auth0. This afternoon, the Auth0 announced its sale to Okta for $6.5 billion. It’s incredible that this team of identity and authentication nerds has been so effective at realizing their vision and achieving today’s amazing milestone. Under the leadership of CEO Eugenio, CTO Matias, and former CEO Jon, Auth0 has transformed from a 5-person startup in 2014 to the world’s leading platform for identity and authentication today.

Sunil Nagaraj and Auth0 CEO Eugenio Pace at the company’s Seattle headquarters

Behind the 2014 Seed Investment Decision: Pairing a “Prepared Mind” with “Prepared Hands”

Since the scientist Louis Pasteur first said “chance favors the prepared mind”, a large number of VCs describe their investing as starting with a “prepared mind”. What they mean is that they select a focus area in advance, read everything they can about it, and then bring that preparation to meetings with startup teams in the sector. This may sound like an obvious strategy, but it’s worth noting that some VCs have the opposite model: the “generalist” who invests across sectors by looking for momentum or a similar in-the-moment signal.

How it Happened: Moving at Founder Speed (10 days)

In late June 2014, I met Jon, Eugenio, and Matias in an extra conference room at Simply Measured’s offices in Seattle. Just 10 days later, I had completed our diligence, drafted a 20-page investment memo, and had secured Bessemer partnership approval to lead this seed round.

Fall of 2014: then-CFO Mark Olson, CTO Matias Woloski, then-CEO Jon Gelsey, CEO Eugenio Pace, GP Carraro
Summer 2016 Auth0 annual retreat; Eugenio Pace, Karan Mehandru, Sunil Nagaraj, Jon Gelsey, and Matias Woloski

How it Happened: Being Obsessed With Customers

You will not find another person on Earth that cares more about understanding someone and communicating something clearly than Auth0 CEO Eugenio Pace. And that doesn’t just mean when talking about identity and authentication. Whatever the topic, Eugenio places the utmost importance on understanding and connecting with his audience. I’ve seen it firsthand in a wide variety of settings, but it has played a major role in Auth0’s success. It was even clear from that first meeting back in 2014, by which point Eugenio had already chosen to step back from CEO to be “VP of Customer Success”(an uncommon title in a seed stage startup; Eugenio later returned as CEO in 2018). Eugenio is authentically invested in his customers’ success.

Congratulations to Eugenio Pace, Matias Woloski, Jon Gelsey and the entire Auth0 team!!!

More fun photos from the Auth0 journey

January 2015: The board room table at Auth0 global headquarters :)
From a January 2015 company dinner; Sunil Nagaraj, GP Carraro, Jon Gelsey, Tomek Janczuk, Mark Olson
Auth0’s Summer 2016 full company retreat

Ubiquity Ventures is a seed-stage venture capital firm focused on “software beyond the screen” — turning real world physical problems into software problems.