Okta agreed Thursday to acquire AI identity security startup Permiso Security, betting that demand for protecting AI agents and other machine identities will grow as companies deploy autonomous software into their operations.

The identity management company did not disclose the terms of the transaction. But TechCrunch has learned that the acquisition is valued at just under $200 million and is structured as an almost all-cash deal, according to a source with knowledge of the deal. An Okta spokesperson did not dispute the figure when asked by TechCrunch, but declined to comment on the specific details of the terms of the deal.

The deal is expected to close in the third quarter of its fiscal 2027, Okta said, subject to customary closing conditions.

Okta’s decision to buy Permission comes as identity management companies look to expand beyond verifying users at login to continually monitoring what users, applications, and AI agents do once they gain authorized access to a network environment. That shift has intensified competition to secure machine identities as companies embed AI more deeply into everyday operations.

Permission, which emerged quietly in 2022, develops software that helps security teams detect suspicious activity in cloud environments after users or applications have been granted access. More recently, the startup has expanded its platform to monitor AI agents and other machine identities.

Co-founded by former FireEye executives Paul Nguyen and Jason Martin, Permission specializes in detecting attacks that use stolen or compromised identities to move through cloud infrastructure. In April, the startup also introduced SandyClaw, a platform designed to analyze the abilities of AI agents in a sandboxed environment to identify malicious behavior before deployment.

The deal strengthens Okta’s push to protect AI agents and other non-human identities alongside its core identity management business.

“Permission will expand Okta’s identity security fabric with proven identity threat detection and response capabilities, and an incredible threat research and security team that will enhance Okta’s threat detection and prevention capabilities,” Okta Chief Product Officer Ely Kahn said in a prepared statement.

Permiso has raised around $29 million to date, including an $18.5 million Series A round in April 2024 led by Altimeter Capital. People familiar with the financing said the Series A valued the Palo Alto-based startup at about $80 million after the money was paid.