Sri Lanka isn't known for its startup ecosystem, but one company has defied the odds. WSO2, an open-source enterprise software provider with clients like Samsung and AT&T, recently agreed to be acquired by private equity giant EQT for a whopping $600 million.
This acquisition, pending regulatory approvals, will make EQT the sole owner of WSO2, rewarding investors and employees alike. In fact, 30% of the proceeds will go to WSO2 employees, potentially creating wealth for those looking to start their own ventures.
WSO2's success story is a testament to the power of equity. Every employee has been a shareholder since day one, a concept that has not been widely understood in Sri Lanka. Founder and CEO Sanjiva Weerawarana believes in the importance of giving back to those who contribute to the company's success.
Thriving through Innovation and Adversity
Founded in Colombo in 2005, WSO2 has thrived despite challenges such as civil unrest and pressure to relocate to the U.S. Weerawarana's vision for a product-oriented tech company in Sri Lanka has paid off, with 80% of WSO2's workforce based in the country.
Despite facing skepticism from investors and competitors, WSO2 has attracted top technical talent in Sri Lanka. The company's commitment to innovation and creativity has set it apart in a services-oriented market.
Intel's Early Investment
Intel's venture capital arm was an early supporter of WSO2, providing critical funding in the company's early days. Pradeep Tagare, a senior investment manager at Intel Capital, recognized the potential of WSO2 and played a key role in securing Intel's initial $2 million investment.
Overall, WSO2's journey from a small startup in Sri Lanka to a $600 million acquisition showcases the power of innovation, perseverance, and strategic partnerships. This success story serves as an inspiration for aspiring entrepreneurs and investors worldwide, highlighting the potential for growth and success in unexpected places.
Investment Manager Reveals WSO2's Rise: From Open Source Startup to Private Equity Acquisition - A Deep Dive Analysis
As the world's best investment manager and financial market journalist, I bring you an exclusive look into WSO2's journey from an open source startup to a private equity acquisition. Tagare, a strategic investor, saw the potential in WSO2 as a key player in the open source movement, especially in Asia where contributions were on the rise. With successful investments in JBoss and MySQL, WSO2 was the perfect fit for Tagare's portfolio.
Fast forward 20 years, and WSO2 has positioned itself as a leader in the cloud computing and microservices space. With the AI revolution in full swing, WSO2 is set to capitalize on the growing demand for APIs and IAM in the AI stack. Recent innovations like the AI-powered chatbot integration showcase WSO2's commitment to staying ahead of the curve.
Despite raising $133 million, WSO2's journey took a unique turn when EQT Private Capital Asia acquired the company. With a controlling shareholder seeking liquidity, WSO2 found itself in a control transaction that paved the way for a new chapter under EQT. The company's profitability and cash flow positivity since 2017 caught the eye of EQT, leading to a projected $100 million in annual recurring revenue by Q3.
From the founder's perspective, selling to private equity wasn't the initial dream, but Weerawarana sees it as a strategic move to enable WSO2's long-term growth and potential IPO. With EQT's focus on building WSO2 for the next five years, Weerawarana's vision of creating a lasting company aligns perfectly with this new chapter.
In conclusion, WSO2's journey from open source startup to private equity acquisition showcases the importance of strategic partnerships and long-term vision in the tech industry. As investors, it's crucial to recognize the potential of companies like WSO2 that are at the forefront of innovation and poised for exponential growth. Stay tuned for more updates on WSO2's success story and the evolving landscape of the tech industry. As the top investment manager and financial market journalist, I reveal the secret to success in the gig economy. Discover how Uber driving is just like any other job, offering a valuable service for payment. Learn about the Avinya Foundation's mission to support skilled workers, including tradespeople, breaking down societal barriers.
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