EQT acquires API and identity management software company WSO2 for over $600 million

WSO2 is a company that provides API management and identity and access management (IAM) services for enterprises. obtained 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 open source API manager, the equivalent of something like Google’s Apigee, which businesses use to build and integrate all their digital services in the cloud or on-premises. In addition to its core service, the company provides related services such as API management specializing in Kubernetes. identity server — Similar to Okta — used by businesses to manage identities and access app features such as single sign-on (SSO).

The latest tranche comes as WSO2, founded in Sri Lanka in 2005, has raised approximately $130 million in funding from Intel, Cisco, Goldman Sachs and others. Via a $93 million Series E round Although the official valuation was not announced, some media articles at the time report The valuation is 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

WSO2 Co-Founder and CEO Sanjiva Weerawarana He has a strong track record in open source, particularly within the Apache Software Foundation project, and was one of the leading architects of cloud native. ballerina programming language. Since 2017, Weerawalana has also been working as his Uber driver. He says it 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 ethos of other businesses founded around open source. Although the company has its U.S. headquarters in Santa Clara and much of its senior leadership team scattered across the U.S., its center of gravity is in Sri Lanka, where many of its employees are based, including Weerawarana, who is based in the capital, Colombo. ing.

With that in mind, it’s worth noting that the acquisition was actually done by an EQT subsidiary called EQT Private Capital Asia (formerly Baring Private Equity Asia), which was raised by EQT. 6.8 billion euros in 2022 It acts as a private equity vehicle for Asia.

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 global scale and an enterprise customer base spanning the US and Europe,” said Gopalakrishnan. 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.