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Okta plans to weave AI across its entire identity platform using multiple models

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One thing is clear this year: generative AI is having a tremendous impact on the software industry, and a week doesn’t pass without software companies announcing their plans to incorporate the seemingly game changing technology into their platforms.

This week, it’s Okta’s turn. The identity company is making a slew of AI-related announcements at the company’s Oktane customer conference, taking place this week in San Francisco.

“I think AI is the next big wave in technology. I think it’s as important and big and impactful as the internet, as cloud, as mobile,” Okta CEO Todd McKinnon told TechCrunch.

For Okta, that means training a model on all of the data it’s been collecting about identity and putting that to work to help make customers safer. “We have a new set of capabilities we’re launching called Okta AI,” he said. “It’s taking all of the really, really valuable data we have from risk signals and usage patterns and customers and policies, and combining them with the latest and greatest AI technology.”

As McKinnon points out, Okta AI isn’t a product per se, so much as a set of capabilities that will be added over time across the platform, some of which will incorporate predictive AI to help security teams understand possible threats, and some of which will allow users to interact with the data to pinpoint problems more easily using generative AI.

While this will involve many different pieces, he highlighted three in particular. The first, Identity Threat Protection looks at traditional identity protection, checking for things like the computer, network, location and other clues to ensure the person signing in, is who they say they are — but it doesn’t stop there.

“With Identity Threat Protection with Okta, AI, the evaluation of your security posture doesn’t stop. It’s continuously getting signals from the entire ecosystem — from CrowdStrike or Palo Alto Networks or Zscalar or any anyone else — and this is integrated with identity fraud protection. The second that there’s any kind of risk anywhere, whether it’s malware on the device or a bad network security posture, [it can identify it],” McKinnon said.

And if it finds something that passes a particular threat threshold, regardless of which system it came from, Okta or one of its partners, it will undertake what McKinnon is calling a ‘universal logout,’ logging the user out from every system until security can resolve the problem.

Next, Policy Recommender proposes an application security configuration based on similar use cases across Okta’s 18,000+ customer base. “You want to get the right balance between ease of use, without checking too much, and still making it secure, especially when the application is sensitive. So Policy Recommender is trained on the policies of thousands and thousands of customers and how they set up these apps,” he said. It uses that data to recommend a policy for each customer, based on their requirements and security posture.

Finally, Log Investigator is a more pure generative AI play, letting users query the Okta logs using natural language to find information. “The basis of this technology is a generative model that looks at all of the queries that people are issuing against the Okta logs to ask questions, and it trains the model on those queries,” he said. “So then the result of it is a natural language interface so customers can just ask questions and the Okta system will respond with answers based on what’s in their logs.”

McKinnon says the company is using a combination of models, depending on the task, including Google, OpenAI and Amazon. The company could also develop its own model in the future, one that will likely be based on open source offerings, he said.

Ray Wang, founder and principal analyst at Constellation Research, says in the future there will be an ongoing security battle with both sides using AI to gain an advantage, and security and identity companies like Okta have little choice but to get on board.

“Customers know that in the future, AI will be battling AI. So this is just the beginning, and they are expecting their identity providers to be able to handle attacks from other AI systems, as well as proactively preparing,” Wang told TechCrunch.

With these and other announcements, Okta is clearly moving toward this world, but it will be judged on how well it executes on these ideas, while protecting customer privacy. For now, these and other AI features being announced this week will go into beta in the coming months, and be generally available sometime next year.



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MoneyHash raises $4.5M for its payment orchestration platform serving merchants in MENA

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The payment landscape in the Middle East and Africa (MEA) region is marked by significant fragmentation, with numerous payment providers and methods in each country, evolving regulations and diverse customer preferences. This complexity is further compounded by challenges such as payment fraud, low checkout conversion rates and high transaction failure rates.

Although the COVID-19 pandemic accelerated the adoption of digital payments in the region, infrastructure development remains inadequate. Payment failure rates are three times higher in the MEA region than the global average, and fraud rates and cart abandonment exceed those of other regions by more than 20%. This presents a challenge for merchants, who often perceive payments as a cost and risk center rather than a strategic enabler.

Payment orchestration platforms streamline payment processes for merchants through unified payment APIs. Egyptian fintech MoneyHash, one of such in Africa and the Middle East, has raised $4.5 million in seed investment, money it plans to use to further invest in its technology and growth across the region. This comes two years after the startup secured $3.5 million in pre-seed.

Nader Abdelrazik, co-founder and CEO of MoneyHash, highlights that 10% of all payments processed in the MEA region are digital, placing MoneyHash uniquely for a growth phase that the region will inevitably experience over the next decade. However, navigating this burgeoning payments market will demand patience and a commitment to continuous learning.

As merchants or companies launch their platforms, they often start by collaborating with one or two payment processing providers. As their operations grow and expand into multiple regions, they onboard additional payment providers to meet their evolving needs. However, integrating different payment stacks presents significant challenges. Besides the operational inefficiencies and technical complexities, in-house tech teams may take several weeks to complete these integrations. In Africa and the Middle East, these challenges are amplified by variations in payment methods, currencies and the isolation between countries.

MoneyHash payment integration catalogue. Image Credits: MoneyHash

MoneyHash’s product includes a unified API to integrate pay-in and pay-out rails, a fully customizable checkout experience, transaction routing capabilities with fraud and failure rate optimizers and a centralized transaction reporting hub. This is complemented by tools enabling various use cases such as virtual wallets, subscription management and payment links. Fintechs such as Revio, Stitch, Credrails and Recital are similar players in the payment orchestration space.

In an email interview with TechCrunch, Abdelrazik shared insights into MoneyHash’s collaboration with merchants over the last four years. For one, he claims that payment failure rates across the region vary significantly, and relying solely on averages can be misleading. While the typical figures are around three out of 10 payments failing on average, the reality differs widely among businesses, he said. For some, it may be as low as one out of 10, while for others, it could be as high as five or six out of 10. Additionally, these figures do not include customers who abandon the checkout process voluntarily before making a payment. The CEO also noted that most of its customers don’t know much about the complexity of payments and, many times, are not aware that most leakages they have in payments are fixable.

Furthermore, merchants are expanding much faster than their partner payment service providers (PSPs). These PSPs operate under stringent regulations, making the rollout of new products and customizations slower than the merchants’ growth trajectory. As a result, MoneyHash has intensified its collaboration with PSPs, particularly those catering to enterprises and prioritizing customer requirements.

“Businesses appreciate the large network of integration we have not just for coverage but for expertise. When they know that we executed all these integrations in-house, they appreciate the team’s expertise and depth of knowledge and leverage our team to navigate difficult questions in payments. They know that working with us makes them future-proof,” noted Abdelrazik, who founded MoneyHash with Mustafa Eid.

“That means team expertise is key for us. Most of the time, we hire exclusively with payments and/or tech backgrounds, even in non-technical positions. We saw massive effectiveness in building a team where customers trust their knowledge and expertise in something specialized and critical like payments.”

Following a beta launch in 2022, which garnered the participation of key regional players like Foodics, Rain and Tamatem, MoneyHash introduced its enterprise suite last October, targeting large enterprises. Over the past year, the fintech, which integrates with various payment gateways and processors, including Checkout, Stripe, Ayden, Amazon Pay, Tap and ValU, claimed to have expanded its network of integrations, tripled its revenue and increased its processing volume by 3,000%.

At present, MoneyHash boasts 50 active paying customers. It does not offer free tiers; most customers accessing its sandbox without payment are potential clients in the assessment stage, numbering over 100. The payment orchestration platform levies a combination of SaaS and transaction fees, commencing at $500 + 0.4%. SaaS fees increase while transaction fees decrease significantly for large enterprises due to volume, Abdelrazik explained.

MoneyHash’s seed round was co-led by COTU Ventures and Sukna Ventures, with participation from RZM Investment, Dubai Future District Fund, VentureFriends, Tom Preston-Werner (GitHub’s founder and early Stripe investor) and a group of strategic investors and operators.

Speaking on the investment, Amir Farha, general partner at COTU, said his firm believes that the full potential of digital payments in MEA is yet to be realized and MoneyHash’s platform can catalyze the growth of digital payments across the region, enabling both global and local merchants to tap into new revenue streams. “We are thrilled to renew our support to a team that has consistently demonstrated superior execution, not just in securing top mid-market and enterprise customers, but also in expanding value across the entire chain, even under challenging market conditions,” he added.



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Snowflake CEO Frank Slootman stepping down — and Wall St hates it

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Apparently Frank Slootman, the veteran tech executive, was popular with investors, at least judging from their reaction that he will be stepping down as CEO of Snowflake. The company stock price has plunged more than 24% in after-hours trading on the news.

Slootman will retreat into the role of chairman of the board, while Sridhar Ramaswamy, former head of Google Ads, who came to the company when it bought AI search engine Neeva last year, will take over as chief executive.

Lost in today’s executive shuffle was the company’s earnings. It reported revenue of $738 million, up a healthy 33% year over year with guidance for the next quarter of between $745 and $750 million, with growth of 26-27%.

Slootman came on board in 2019, taking over for veteran executive Bob Muglia, and was charged with taking the company public the following year. Over the last year, the stock has done well, up around 50% (the exact amount is hard to tell with this afternoon’s downward spiral), as many tech stocks recovered from 2022 doldrums.

He was famously well-compensated, with a base salary of $375,000 and a rather attractive stock option. In fact, Fortune reported that the chief executive was making an eye-popping $95 million a month at one point.

He raised eyebrows in 2021 when he told a reporter that diversity shouldn’t override merit, and eventually walked back those comments after a negative reaction from industry peers.

Prior to coming to Snowflake, he spent six years as chairman and CEO at ServiceNow. With all that cash, perhaps he’ll retire and enjoy his money.



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Fintech giant Stripe’s valuation spikes to $65B in employee stock-sale deal

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Payments infrastructure giant Stripe said today it has inked deals with investors to provide liquidity to current and former employees through a tender offer at a $65 billion valuation.

Notably, the valuation represents a 30% increase compared to what Stripe was valued at last March when it raised $6.5 billion in Series I funding at a $50 billion valuation. But it is also still lower than the $95 billion valuation achieved in March of 2021.

While Stripe declined to comment beyond a written statement, a source familiar with the internal happenings in the company told TechCrunch that Stripe and some of its investors agreed to purchase over $1 billion of current and former Stripe employees’ shares.

The company, which counts the likes of Alaska Airlines, Best Buy, Lotus Cars, Microsoft, Uber and Zara as customers, had noted at the time of its last raise that the proceeds would go to “provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards.” That, it added, would result in the retirement of Stripe shares that would offset the issuance of new shares to Series I investors.

A Stripe IPO has been long anticipated and was widely expected to happen in 2024. But with this deal, it appears that an initial public offering may not take place until next year.

In January, TC’s Rebecca Szkutak reported that — in anticipation of that IPO and according to secondary data tracker Caplight — there had been “an absolute flurry of buyers looking to get shares in the company in recent months.” On January 2, a secondary sale closed that valued Stripe shares at $21.06 apiece and valued the startup at $53.65 billion, according to Caplight data.

While Stripe did not name the investors participating in the latest deal, Sequoia Capital Managing Partner Roelof Botha was quoted in Stripe’s announcement and The Wall Street Journal cited Goldman Sachs’s growth equity fund as another backer.

The WSJ also reported that the transaction “is part of a commitment by the Collison brothers to provide liquidity annually to longtime and former employees.” Sources familiar with internal happenings at the company said that commitment is more to provide liquidity “regularly,” and not necessarily annually.

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