WSO2, a company providing API management and identity and access management (IAM) services for enterprises, has been acquired by the Swedish investment giant EQT.
Terms of the deal weren’t disclosed, but TechCrunch has learned from sources that it values WSO2 at “over” $600 million, with EQT getting a “substantial majority” share of that price.
WSO2 products include open source software API Manager, comparable to something like Google’s Apigee, which corporations use to build and integrate all their digital services, each in the cloud and on-premises. The company offers tangential services akin to API management specifically for Kubernetes, in addition to its flagship Identity server — something like Okta — that corporations use to administer identity and access features in their applications, akin to single sign-on (SSO).
WSO2, founded in Sri Lanka in 2005, has raised roughly $130 million in funding from corporations including Intel, Cisco and Goldman Sachs, with the final tranche due via a $93 million Series E round in 2022. No official quote was given, but articles from some outlets at the time reported valued at over $600 million. This would due to this fact mean that WSO2 stays somewhat stagnant, although the “more than” aspect may hide some changes in the company’s valuation.
Strong achievements
Co-founder and CEO of WSO2 Sanjiv Weerawaran has extensive experience in the open source sphere, especially in Apache Software Foundation projects, and was one of the lead designers of the cloud-native solution Ballerina programming language. Since 2017, Weerawarana also drives for Uber, what he thinks it is intended for to “challenge norms” and make them more socially acceptable in his native Sri Lanka.
WSO2 is a fairly well-distributed company, which is consistent with the ethos of other open source corporations. Although the company has its U.S. headquarters in Santa Clara and many of its senior executives are scattered throughout the United States, its center of gravity is in Sri Lanka, where most of its employees work – including Weerawarana in the capital Colombo.
With this in mind, it is value noting that the acquisition was actually made by a subsidiary of EQT called EQT Private Capital Asia, formerly referred to as Baring Private Equity Asia, from which EQT acquired in 2022 for EUR 6.8 billion function a private equity vehicle in Asia.
Given its global customer base that features AT&T, Honda and Axa, this is something that EQT Private Capital Asia partner Hari Gopalakrishnan says was a key a part of the investment decision. Moreover, with the demand for cloud security and artificial intelligence infrastructure, WSO2 was a particularly attractive proposition for a latest type of enterprise software investment firm.
“Software is a key sector of interest for EQT, and WSO2 is a strong business that has grown globally, with an enterprise customer base spread across the U.S. and Europe,” Gopalakrishnan said in statement. “[We] we imagine the company is well positioned to capitalize on long-term trends akin to digital transformation and the growing use of GenAI.”
EQT says it expects to finish the acquisition in the second half of 2024.