Today, WSO2 has over 900 employees producing $100 million in annual revenue, according to Weerawarana. Its headquarters are in Santa Clara, California, though Weerawarana remains in Colombo with the product development team. Beyond Sri Lanka and the US, the company also has offices in the UK, Brazil, Germany, Australia, UAE, India and Malaysia serving over 800 direct customers, plus 5,000 or so OEM customers and 25,000 open source customers. While WSO2 originated for the small business market, it successfully moved into the enterprise arena serving companies like Panasonic, AMP and Qantas. It now offers a SaaS subscription service that has become its primary source of revenue.
Over the past 18 years, the company raised a total of $133.5 million over six funding rounds. Their latest Series E round funding raised $3 million in May of 2022 led by Redstart Labs which came on top of its $90 million fund raise, also a Series E, led by Goldman Sachs. Additional investors from previous rounds include Pacific Systems Control Technology, Toba Capital, Quest Software, Intel Capital and others.
Neither raising funds in the beginning nor growing and managing WSO2 has been a straight line journey toward success for Weerawarana. He left IBM to create his own company with little to no financing. Then, he met with James Clark, legendary software entrepreneur and investor.
“When I quit IBM, we didn’t have any money raised. We started talking to people and I reconnected with James Clark, who I met in 1998 while representing IBM in the XML transformations committee. I also knew he was a brilliant technical guy. Because of the 2004 tsunami, we built a software system called Sahana, which is now its own foundation called Sahana Software Foundation, which is a disaster management platform,” says Weerawarana.
As a result of this work, the Thai government gave Weerawarana an award. “When I traveled to Thailand in February of 2005 to receive it, I met with James Clark and told him ‘I’m trying to start this company.’ James said, ‘Okay, sounds good. I am willing to help,’” says Weerawarana.
Clark’s angel investment helped float the company and Weerawarana set about registering the company with the name “Serendipity,” which sounded like Serendib, an old name for Sri Lanka. But serendipity.com was not available. They brainstormed ideas, but with two conditions: the name had to have a semantic meaning, and the domain name had to be available. “We finally came up with WSO2. The name came from web services oxygen, although it doesn’t stand for this. That is why in the logo, the 2 is dropped like the oxygen symbol. And inside the O, there’s a heartbeat sign. That heartbeat sign represents support, which is our business model, because we were giving all our software away for free, and selling support,” says Weerawarana.
After the initial angel investment, Weerawarana sought traditional VC funding from firms on Sand Hill Road in Palo Alto. Everyone turned him down once they heard the company was based in Sri Lanka, except one investor from Intel Capital, Pradeep Tagare, whom he met at an open source conference in 2006. Intel Capital then led WSO2’s Series A funding for $4 million.
Through a series of acquisitions, Cisco wound up owning an investment in WSO2. In 2013, Cisco wanted to buy the company and offered $127 million based on $8 million in revenue. But WSO2 investor, Toba Capital founder and now executive chairman, Vincent Smith thought that there was a lot more that WSO2 could do as an independent company. Smith then bought out the other investors, allowing the company to pursue its growth path and other investment options.
Yet the company hadn’t fulfilled its potential. While its products and technology were well received, there was a lack of market presence and sales. Weerawarana decided to step aside as CEO and the board brought in a CEO with sales and marketing experience. The new CEO didn’t work out as planned and the board decided to reinstate Weerawarana as head of the company. Weerawarana says he needs five years to build and is planning to IPO the company.
Weerawarana was born and raised in Sri Lanka. He came to the US to complete his education earning his bachelor’s and master’s degrees from Kent State University and then earning his PhD at Purdue University before working for IBM Research. Despite spending so much time in the US, he is passionate about Sri Lanka’s future and is active when it comes to social issues, sharing his political views regularly on his blog.
“I’m very bullish about Sri Lanka because we have only 20 million people. We have incredible natural resources. Tourism can be a huge thing here. Our basic statistics are world class—life expectancy, healthcare, education—all world class,” says Weerawarana, who contributes both his time and resources to several Sri Lankan-based philanthropic initiatives.
Among his many initiatives, he is founder and chairman of the Lanka Data Foundation, a non-profit focused on archiving all public data in Sri Lanka, connecting dots to derive meaningful and accessible insights and delivering it to Sri Lankan citizens, businesses and government. He is also founder and chairman of the Avinya Foundation, whose vision is to bring dignity and pride to skilled workers by giving 16–17-year-old students the option to directly pursue a career focused on vocational education.
As for the future? Weerawarana is particularly proud of the company’s introduction of Ballerina, an open source general-purpose programming language designed by WSO2 for cloud-era application programmers, which he thinks will help identify both the company and Sri Lanka as a place for tech innovation. On the business side, Weerawarana says, “Our goal is to list in the US markets, and my preferred market is LTSE (Long-Term Stock Exchange).”
