WSO2, a company that provides API management and identity and access management (IAM) services for enterprises. has been acquired by the 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 an open source API manager, comparable to something like Google’s Apigee, which businesses use to build and integrate all of 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 (something similar to Okta) that companies use to manage identity and access functionality in their applications, such as single sign-on (SSO).
WSO2, founded in Sri Lanka in 2005, had 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 valuation was never announced, but articles from some media at the time reported a valuation of more than $600 million. That would mean that WSO2 has remained somewhat stagnant, although the “more than” facet here could mask some movement in the company’s valuation.
A solid track record
Co-founder and CEO of WSO2 Sanjiva Weerawarana has a strong track record in the open source sphere, particularly among the Apache Software Foundation projects, and was one of the principal designers of cloud-native software. dancer programming language. Since 2017, Weerawarana has also been driving for Uber, which, according to him, is designed to “challenge the norm” and make it more socially acceptable in his native Sri Lanka.
WSO2 is a fairly well distributed company, in line with the ethos of other companies founded around open source. While the company has a U.S. headquarters in Santa Clara, and many of its senior leadership teams are spread across the country, its center of gravity is in Sri Lanka, where much of its workforce, including Weerawarana, which is based in the capital Colombo.
With this in mind, it’s 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 acquired. in 2022 for 6.8 billion euros to serve as its private equity vehicle for Asia.
With a global customer base that includes AT&T, Honda and Axa, this is something Hari Gopalakrishnan, partner at EQT Private Capital Asia, says was a key part of his decision to invest. Additionally, with cloud computing and artificial intelligence driving demand for security infrastructure, WSO2 was a particularly attractive proposition for an investment firm with recent entry into the enterprise software space.
“Software is a key sector for EQT, and WSO2 is a strong company that has scaled globally with an enterprise customer base spread across the US and Europe,” Gopalakrishnan said in a statement. “[We] I 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.
