WSO2, a company that provides API management and identity and access management (IAM) services for enterprises, has been acquired from the Swedish investment giant EQT.
Terms of the deal were not disclosed, but TechCrunch has learned through sources that the deal values WSO2 at “more than” $600 million, with EQT securing a “substantial majority” of the price.
WSO2 products include open source API Manager, comparable to something like Google’s Apigee, which businesses use to build 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 — kind of like Okta — that companies use to manage their identity and app access functionality like single sign-on (SSO).
Founded by a Sri Lankan in 2005, WSO2 has raised around $130 million in funding from companies including Intel, Cisco and Goldman Sachs, with the latest installment coming through a $93 million Series E round in 2022. No official valuation was ever announced, but articles from some outlets at the time mentionted worth over $600 million. So that would mean WSO2 has remained somewhat stagnant, although the “more than” aspect here could mask some movement in the company’s valuation.
Strong track record
Co-founder and CEO of WSO2 Sanjiva Weerawarana has a strong track record in the open source realm, particularly among Apache Software Foundation projects, and was one of the primary architects of cloud-native Ballerina programming language. As of 2017, Weerawarana also drives for Uber, which says it is designed to To “challenge the norm” and make it more socially acceptable in his native Sri Lanka.
WSO2 is a fairly well-distributed company, in keeping with the ethos of other companies founded around open source. While the company has US headquarters in Santa Clara and many of its senior executives are spread across the US, its center of gravity is in Sri Lanka where much of its workforce is based — including Weerawarana, who is based in the capital Colombo .
With this in mind, it is worth noting 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 procured in 2022 for 6.8 billion euros to serve as a private equity vehicle for Asia.
With a global spread of clients that includes AT&T, Honda and Axa, this is something EQT Private Capital Asia partner Hari Gopalakrishnan says was a key part of its decision to invest. Additionally, with cloud computing and artificial intelligence driving demand for security infrastructure, WSO2 was a particularly attractive proposition for a recent investment firm in the enterprise software space.
“Software is a key focus area for EQT and WSO2 is a strong company that has scaled globally with an enterprise customer base spanning the US and Europe,” Gopalakrishnan said in a statement. “[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.
