WSO2, a company that provides API management and identity and access management (IAM) services for enterprises, was acquired by Swedish investment giant EQT.
Terms of the deal were not disclosed, but TechCrunch has learned from sources that the deal values WSO2 at “more than” $600 million, with EQT getting a “significant majority” stake for the price.
WSO2 products include open source software API Managercomparable to something like Google Apigee, which companies use to create and integrate all their digital services, whether in the cloud or on-premises. The company offers tangential services such as API management specifically for Kubernetes as well as its flagship Identity Server – a little something like Okta — which companies use to manage identity and access functionality in their applications, such as single sign-on (SSO).
WSO2, which was founded in Sri Lanka in 2005, has raised around $130 million in funding from companies including Intel, Cisco and Goldman Sachs, with its most recent tranche coming through a $93 million Series E round in 2022. An official evaluation was never announced, but articles from some outlets at the time reported a valuation of more than $600 million. Therefore, this would mean that WSO2 has remained somewhat stagnant, although the “more than” facet here may disguise some movement in the company’s valuation.
A strong track record
Co-founder and CEO of WSO2 Sanjiva Weerawarana has a strong track record in the open source sphere, especially among the Apache Software Foundation projects, and was a leading designer of cloud-native software. Ballerina programming language. Since 2017, Weerawarana has also driven for Uber, which he says is designed to “challenge the norm” and make it more socially acceptable in his home country of Sri Lanka.
WSO2 is a fairly well-distributed company, in keeping with the spirit of other companies founded around open source. Although the company has a US headquarters in Santa Clara, and many of its senior leadership team are spread across the US, its center of gravity is in Sri Lanka, where much of its workforce is located – including Weerawarana, who is based in the capital Colombo.
With this in mind, it is important to note that the acquisition was actually made by a subsidiary of EQT called EQT Private Capital Asia, formerly known as Baring Private Equity Asia, which EQT acquired in 2022 for 6.8 billion euros to serve as its private equity vehicle for Asia.
With a global client spread that includes AT&T, Honda and Axa, this is something that Hari Gopalakrishnan, partner at EQT Private Capital Asia, says was a key part of his decision to invest. Furthermore, with cloud computing and AI driving demand for security infrastructure, WSO2 was a particularly attractive proposition for an investment firm with Recent form in the enterprise software space.
“Software is a key focus sector for EQT, and WSO2 is a strong company that has grown globally with an enterprise customer base spread across the US and Europe,” Gopalakrishnan said in a statement. declaration. “[We] We believe the company is well positioned to capitalize on long-term trends such as digital transformation and the growing adoption of GenAI.”
EQT says it expects the acquisition to close in the second half of 2024.
