Topics
Latest
AI
Amazon
Image Credits:WSO2 / CEO and co-founder Sanjiva Weerawarana
Apps
Biotech & Health
Climate
Image Credits:WSO2 / CEO and co-founder Sanjiva Weerawarana
Cloud Computing
Commerce Department
Crypto
WSO2 CEO Sanjiva Weerawarana speaks to media during a product launch in Colombo on February 26, 2014.Image Credits:Ishara S.KODIKARA/AFP via Getty Images
Enterprise
EVs
Fintech
fund-raise
gadget
stake
Government & Policy
computer hardware
Layoffs
Media & Entertainment
Meta
Microsoft
secrecy
Robotics
Security
Social
infinite
Startups
TikTok
Transportation
Venture
More from TechCrunch
issue
Startup Battlefield
StrictlyVC
Podcasts
Videos
Partner Content
TechCrunch Brand Studio
Crunchboard
Contact Us
Sanjiva Weerawarana founded enterprise software firm WSO2 in 2005, got it close to $100M in ARR, then sold it to private equity firm EQT in May.He sometimes drives for Uber, too.
Sri Lanka is n’t far-famed for its startup ecosystem , but one ship’s company has been something of an outlier in the South Asiatic island nation these preceding two decades . WSO2 , an open source enterprise software program supplier withcustomerssuch as Samsung , Axa , and AT&T , recentlyagreed to beacquired byprivate equity colossus EQT , at a valuation TechCrunch report at the prison term to be northerly of $ 600 million . ( We can now substantiate that the evaluation was in fact incisively $ 600 million . )
The transaction , which remains subject to regulative approvals , means that EQT will become WSO2 ’s sole owner , procure all outstanding ploughshare , including those of WSO2 ’s investor and current and old-hat - WSO2 employee .
This liquidity case could also create substantial wealth among those inclined to bulge their own ventures , give that 30 % of the proceedswill be goingto those employee .
“ This read that fairness is important — one of the things that we have insisted on from solar day one is that every employee has been a shareholder , ” WSO2 co - beginner and CEOSanjiva Weerawaranatold TechCrunch in an interview . “ That ’s very important , and it ’s a conception that has not been understood here before , because there have n’t been companies that exited and gave any amount of meaningful financial return . find out is believing , correct ? talk of the town is cheap . ”
Thriving through war and unrest
Founded out of the Sri Lankan capital , Colombo , in 2005 , WSO2 is a middleware stack constituting cock such as API management , similar to Apigee ( Google adopt for $ 625 million ) , and individuality and access management ( IAM ) , along the lines of $ 15 billionpublicly traded Okta .
The principal driving force out behind this has been Weerawarana , a computer scientist and key figure in the open source community over the retiring 25 year , both as a member of the Apache Software Foundation and more recently as the Lord ofBallerina , a cloud - aboriginal worldwide - intention computer programing spoken communication for integrating deal system .
Prior to WSO2 , Weerawarana worked within IBM ’s research and growth team in the U.S. , where he helped develop web service of process spec such asWSDLandBPEL . And it was there that the cum for WSO2 was sown .
Join us at TechCrunch Sessions: AI
Exhibit at TechCrunch Sessions: AI
“ I actually tried inside IBM to build a new form of middleware stack , but IBM was n’t interested , ” Weerawarana order . “ So the only option was either start out a troupe or give up on the idea . ”
Weerawarana spawned WSO2 in August 2005 alongside two co - founder : Davanum Srinivas , who allow after two days , and Weerawarana ’s former IBM colleaguePaul Fremantle , who would go on to serve as CTO until stepping downin 2015(he later on rejoined and then left again , but remains an adviser today ) .
Notably , WSO2 ’s center of gravitation has continue in Sri Lanka , despite along - put up civil warand extraneous pressing to relocate to the U.S. , where Weerawarana had survive previously for 16 years .
“ I total back [ to Sri Lanka ] in 2001 , and two weeks before I landed in Colombo , the airportwas attackedby a terrorist radical — there were still art object of planes on the footing , ” he say . “ In 2005 , the war was still going on . Sri Lanka as a country has not been able to keep a logical calm environment for us , but that ’s okay . ”
Today , 80 % of WSO2 ’s 780 employees are in Sri Lanka , with the remainder broadcast acrossa handful of hubsin the U.S. , Europe , and Asia .
“ I wanted to show we could build a product - orient technical school society from Sri Lanka , ” Weerawarana continued . “ There had never been a company like this , and at that time there was n’t even a company out of India like this . Indian companies were very services - oriented , as were Sri Lankan companies . But one of the big prices [ for staying in Sri Lanka ] was that at pretty much every funding around , the legal age of investors would ask when I was moving back [ to the U.S. ] . And my solution was always the same : ‘ I ’m not moving back . ’ ”
Investors were n’t the only ones who pressured WSO2 to move : Customers and competitors have also used its positioning against it at various occasion .
“ Some of our competitors fight against us , saying , ‘ Do you know where they are settle ? ’ and that becomes a challenge , ” Weerawarana said . “ Then we ’ve had customers saying , ‘ You ’re settle mode over there . Why are you tear us these price ? ’ ”
On the flip side , WSO2 ’s geographical setting gave it the choice of proficient endowment , own mostly to the fact that it was a product - based line in a ocean of services .
“ We ’ve never had a problem with engineering and technical gift . We ’ve been able to engage the best people in Sri Lanka for the last 19 years , ” Weerawarana said . “ If you are a originative engineer , would you rather work for a service company , or be in a role where you could be originative and cultivate on top - of - the - billet technology ? ”
Intel inside
After WSO2 arouse a small circle of Angel Falls support in 2005 , Intel ’s VC branch issue as its earliest backer , investingin 2006and throughseveral follow - on roundsin subsequent years .
Intel Capital ’s initial $ 2 million cash shot was critical to WSO2 ’s early growth and was the result of uncaused timing . Pradeep Tagarewas a fourth-year investment funds manager at Intel Capital at that time and met Weerawarana through their associations with the Apache Software Foundation . Tagare was looking to invest in an open germ startup to complement a duo of other open source investments it had made — one intoJava - centrical program host caller JBoss(which Red Hatlater acquiredfor $ 350 million ) and another intodatabase company MySQL(which Sunlater snapped upfor $ 1 billion ) .
“ We were looking at a cluster of open source investment as a strategic initiative for Intel , essentially to make an alternate stack on Intel computer hardware , ” Tagare explained to TechCrunch . “ We had seat in JBoss , and we seat in MySQL . So we were now look for an open source middleware society , and WSO2 fit the bank bill precisely . ”
Tagare ’s thesis was that countries situated in Asia would not only endure to profit from the loose source movement , but would also be probable to give a mountain . receptive germ software development is naturally distribute , open up up the put on and quislingism process to those who did n’t puzzle out at the Big Tech company of those times .
“ Now they could contribute — before , it was all really controlled by the Microsofts and the Oracles of the world , ” Tagare said . “ Its location was n’t necessarily a requirement , but being base in Asia just made WSO2 even more interesting . ”
Much has changed in the 20 eld since WSO2 arrived on the scene . With the Second Advent of cloud computing andmicroservices — software program built from smaller , loosely plug into components that can be prepare and maintained severally and that handily rely on genus Apis — WSO2 has been well - positioned as enterprises passage from legacy monumental applications .
Now with theAI gyration in full baseball swing , WSO2 is also countersink to capitalize give that APIs and IAM are primal components of the AI hatful — from integrations through certification and beyond . Moreover , WSO2 is integrating AI into its own products , recentlydebuting a new API managerthat provide developers to integrate an AI - powered chatbot into their APIs to reserve non - coders to test APIs using natural language .
According toCrunchbase data , WSO2 call down $ 133 million over the years . However , Weerawarana clarified that only $ 70 million was basal Washington . Other rounds , like the$93 million Series E round two years agoled by Goldman Sachs , consist of equity and debt .
However the funding is slice and diced , there ’s no ignoring the fact that WSO2 was a startup dinosaur by the clip EQT came calling . After all , most successful VC - backed companies make an exit within 10 year .
So what gives ?
“ We ’ve had multiple people wanting to buy our company through the years , but I resisted because I always wanted to build a ship’s company that would reach an initial offering — an independent patronage , essentially , ” Weerawarana said .
That all changed in May , when WSO2 accepted an offering fromEQT Private Capital Asia(formerly Baring Private Equity Asia ) , a individual fairness business firm EQT acquiredin 2022 for more than $ 7 billion . The difference this time was simple : One of WSO2 ’s manipulate stockholder “ wanted to get liquidity , ” according to Weerawarana .
“ Because they had more than 50 % , it becomes a control dealing , ” he enounce .
That shareholder was San Francisco - basedToba Capital , a VC house set up byVinny Smithin 2012 after hesold Quest Software to Dellfor more than $ 2 billion . Quest had previouslyinvested in WSO2 , fairness that shift to Dell through that learning — but Toba bought that stock back from Dell and went on to make further investment in WSO2 , including buying Intel Capital ’s portion . Toba Capital partnerTyler Jewell also replacedWeerawarana as CEO for a two - class period , with Weerawarana returning to the hot seat in 2020 .
Weerawarana says the company has been cash - flow positive since 2017 and profitable “ since around 2018 , ” but it has n’t had the luxury of immense pools of capital that would permit it to await at “ multiple year strategies . ” This is something it will be able-bodied to do under EQT , one ofthe world’sbiggest private equity firms .
Indeed , WSO2 order it will hit $ 100 million in annual repeat gross ( ARR ) by Q3 this twelvemonth , which is one of the key intellect EQT came calling .
“ WSO2 really has all the component we look for in a software stage business , ” EQT partner and global carbon monoxide - head of services Hari Gopalakrishnan told TechCrunch . “ Deep and long - lasting enterprise client relationship , successful product - led - growth , technically robust products , and prudent financial direction . Pick a strength , WSO2 credibly has it . ”
From the exterior , selling to secret equity might not seem like the dream event for a founder with ambitions to go public and who values his company ’s independence . But Weerawarana insists that this outcome will well enable WSO2 to do just that .
“ I started the party to make something that lasts . One of the reasons we did n’t sell it previously is that we get it on that would be the death of it , ” he allege . “ EQT does n’t have any other businesses in this domain , they ’re trying to build around WSO2 , not merge it with something else . Their goal is to establish the company for five years , which line up with what I want , and gives us five long time to get to an IPO . ”
Driving force
While course WSO2 is a meter - ingest endeavor on its own , Weerawarana keeps busy with other initiatives such as a philanthropic travail call up theAvinya Foundation , which he establish in 2022 to tolerate economically deprived baby via vocational Department of Education programs .
In 2017,Weerawarana also get drivingfor Uber , a move he say was designed to make it more socially acceptable in Sri Lanka to work in such job . If a successful businessman like him can do it , then anyone can .
“ I would be derive home from work and I would just find fault somebody up along the way , ” he say . “ The main point I was trying to get across was that somebody who does a driving job is no unlike to somebody who does any other job — they ’re just offering a service and you pay for it . We have this mindset here that citizenry who do certain kinds of job are not the same as other sort of people . And break that is very important — doing Uber - driving is part of it . The Avinya Foundation is also focalize on that job , trying to stomach all our skilled workers , such as tradespeople . ”
The pandemic , among other ball-shaped event , put a temporary halt on Weerawarana ’s Uber drive exploits ; because people were doing it for survival , he did n’t need to take money from masses who needed it .
“ I will do it again — things are make much just , ” he said . “ Tourism is almost back to normal , so the requirement will be there , and it might make sense for me to drive . But I do n’t want to take any concern from somebody else . ”
