Despite not being widely recognized for its startup landscape, Sri Lanka is home to a standout enterprise over the last twenty years. WSO2, a provider of open-source enterprise solutions, counts among its clientele well-known firms like Samsung, Axa, and AT&T. The company recently entered into an acquisition agreement with EQT, a major name in private equity, for a sum that was initially reported by TechCrunch to exceed $600 million, a figure now confirmed to be precisely $600 million.
Pending regulatory green lights, this deal will see EQT taking over full ownership of WSO2, acquiring shares from not only investors but also from current and former employees of WSO2 — with 30% of the sale proceeds earmarked for these employees.
This significant financial event may well propel many recipients towards founding their ventures.
“Equity has always been a foundational aspect — from the outset, we’ve made sure that all employees are shareholders,” shared WSO2’s co-founder and CEO, Sanjiva Weerawarana, during a TechCrunch interview. “The concept of rewarding employees through equity wasn’t common here before. It’s one thing to talk about it, but witnessing it firsthand has a much stronger impact.”
Succeeding Amid Conflict and Turmoil
Originating in Colombo in 2005, WSO2 provides a suite of middleware solutions, offering services like API management and identity and access management, drawing parallels to major players like Apigee and Okta. The driving force behind WSO2 has been Weerawarana, a pivotal figure in the open-source realm for a quarter-century, known for his involvement with the Apache Software Foundation and for creating Ballerina, a programming language aimed at cloud-native integration of distributed systems.
Before establishing WSO2, Weerawarana contributed to IBM’s R&D sector in the U.S., helping to develop key web service specifications. His experience there laid the groundwork for WSO2’s creation.
Discussing the roots of WSO2, Weerawarana recalled his efforts at IBM to innovate within the middleware space, which ultimately led him to venture out on his own when his ideas did not take hold at IBM.
Thus, in August 2005, alongside co-founders Davanum Srinivas and Paul Fremantle, Weerawarana established WSO2. Notably, despite global pressures, the company chose to retain its core operations within Sri Lanka, undeterred by ongoing civil conflict and the associated challenges.
Today, the majority of WSO2’s workforce—comprising 780 employees—is based in Sri Lanka, despite the availability of office locations across the globe.
Weerawarana’s ambition was to demonstrate the feasibility of nurturing a product-centric tech company in Sri Lanka, a vision distinct from the predominantly service-oriented landscape of the region’s tech industry.
Despite questioning from investors and critics alike about its base of operations, WSO2 has thrived, leveraging its unique position to attract top-tier talent from within Sri Lanka’s rich pool of engineers and developers.
Intel’s Early Support
WSO2’s journey was kickstarted with angel investment in 2005, soon attracting the attention of Intel’s venture capital division. The latter’s involvement came as a boon, particularly through a pivotal $2 million infusion that bolstered WSO2’s early development, aligning with Intel Capital’s strategy of supporting open source initiatives.
The company’s evolution over the years has positioned it advantageously in the age of cloud computing and microservices. With the ongoing surge in AI, WSO2’s expertise in APIs and identity management is increasingly relevant, not to mention its own efforts to imbue its offerings with AI functionalities.
Discussing the company’s financial trajectory, Weerawarana pointed out the strategic financial planning that has enabled continuous growth, culminating in a valuation appealing to EQT, which led to the acquisition partnership aimed at further scaling WSO2’s contributions to the tech ecosystem.
Beyond Business
In addition to leading WSO2, Weerawarana engages in philanthropy through the Avinya Foundation, focusing on vocational education for underprivileged youth. Moreover, his brief stint as an Uber driver was a deliberate move to challenge societal stigmas attached to service jobs, highlighting the dignity in all forms of work.
The narrative of WSO2 and its founder encapsulates not only the journey of a tech enterprise thriving amid challenges but also the broader implications of technology, equity, and social entrepreneurship in shaping future societies.
Compiled by Techarena.au.
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