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The next tech IPO, Okta, has priced at the top of its range and will be worth $1.5 billion

Okta co-founder and CEO Todd McKinnon.
Source: Okta
Okta co-founder and CEO Todd McKinnon.

Okta, a developer of security and identity management software in the cloud, is raising $187 million in an IPO for a market value of $1.5 billion, after pricing its offering at the top end of the expected range. Shares will start trading on Friday.

The company, co-founded and run by former Salesforce executive Todd McKinnon, said Thursday afternoon that it sold 11 million shares for $17 apiece. The stock is set to debut on Friday on Nasdaq under the ticker OKTA.

Technology companies are hitting the public markets again after a dreadfully slow 2016, which saw the fewest venture-backed offerings in seven years. Social media company Snap and software developer MuleSoft both priced above their expected range and then popped on their first day of trading. AppDynamics was acquired by Cisco before it could go public -- and at a much higher price than where it was set to trade.

Okta's revenue in the year ended January jumped 87 percent to $160.3 million. The company spent almost $120 million on sales and marketing in the year, leading to a net loss of $83.5 million.

Like most emerging subscription software companies, Okta invests heavily upfront in landing customers with the expectation that over time businesses will increase their spending and turn profitable.

Sequoia Capital is Okta's biggest investor with a 19 percent stake after the offering, followed by Andreessen Horowitz at 17 percent, Greylock Partners at 15 percent and Khosla Ventures at 7.1 percent. McKinnon owns 9.1 percent.