WSO2, which provides API management and identity and access management (IAM) services for enterprises, has been acquired by 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” and that EQT will acquire a “substantial majority” stake at that price. I learned.
WSO2's products include an open source API manager, comparable to Google's Apigee, that enterprises use to build and integrate all their digital services in the cloud or on-premises. The company offers tangential services such as Kubernetes-specific API management, as well as its flagship Identity Server (similar to Okta), which enterprises use to manage app identity and access features, such as single sign-on (SSO). ) and more.
Founded in Sri Lanka in 2005, WSO2 has raised approximately $130 million in funding from Intel, Cisco, Goldman Sachs and others, with the latest tranche coming in 2022 through a $93 million Series E round. It will be done. The official appraisal value is as follows. Although no announcement was made, some media articles at the time reported that the valuation was over $600 million. This means that WSO2 remains somewhat stagnant, but the “more than” aspect here could mask movements in the company's valuation.
strong track record
Sanjiva Weerawarana, co-founder and CEO of WSO2, has a strong track record in the open source space, particularly with Apache Software Foundation projects, and was one of the principal architects of the cloud-native Ballerina programming language. Mr. Weerawalana has also been working as an Uber driver since his 2017. He says Uber is designed to “challenge norms” and be more socially acceptable in his native Sri Lanka.
WSO2 is a fairly well-distributed company, in keeping with the ethos of other businesses founded around open source. The company has its U.S. headquarters in Santa Clara, and much of its senior leadership team is spread across the U.S., but its center of gravity is in Sri Lanka, where many of its employees are based, including Weerawarana, who is based in the capital, Colombo. There is.
With that in mind, it's worth noting that the acquisition was actually done by a subsidiary of EQT called EQT Private Capital Asia (formerly known as Baring Private Equity Asia). EQT raised the subsidiary in 2022 as a private equity vehicle for Asia for 6.8 billion euros. .
The company's global clientele, including AT&T, Honda and AXA, was an important part of the investment decision, said Hari Gopalakrishnan, partner at EQT Private Capital Asia. Additionally, cloud computing and AI are driving demand for security infrastructure, making WSO2 a particularly attractive proposition for investment firms recently active in the enterprise software space.
“Software is a key focus area for EQT, and WSO2 is a strong company with growing global scale with an enterprise customer base spanning the US and Europe,” Gopalakrishnan said in a statement. “[We] The company believes it is well-positioned to take advantage of long-term trends such as digital transformation and increased GenAI adoption. ”
EQT said it expects the acquisition to close in the second half of 2024.