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WSO2 secures $20m funding to expand delivery of IoT middleware

Steve Rogerson
August 19, 2015
 
California-based WSO2 has closed a $20m funding round led by Pacific Controls, a provider of IoT and M2M products, and joined by Toba Capital. The investment comes in the wake of increasing demand for WSO2’s open source middleware platform for building, integrating, managing, securing and analysing companies’ APIs, applications and web services – on-premises, in the cloud, on mobile and on IoT devices.
 
WSO2, which celebrated its tenth anniversary this month, has 2.2 trillion customer transactions per year running through the company’s cloud and enterprise middleware. The growth comes as more enterprises worldwide rely on WSO2 to achieve agility and fast-track their innovation. The company was ranked 211th on Deloitte’s Technology Fast 500 for 2014.
 
“Ten years ago, we saw that the rapid business and IT changes facing enterprises would be best supported by redefining middleware as an open modular platform that could be implemented, expanded and modified just as quickly,” said Sanjiva Weerawarana, WSO2 founder, CEO and chief architect. “The agility of our customers and our company to adapt to new opportunities – such as those powered by APIs, mobile, IoT and the cloud – have led to strong revenues and customer adoption worldwide, validating our vision. With the investment by Pacific Controls and Toba Capital, both leaders in cultivating technology innovation, we can now strategically accelerate our ability to deliver on this vision.”
 
The company will use the growth financing to advance the worldwide delivery of next-generation middleware that address new business and IT models fuelled by APIs, IoT, mobile computing and the cloud. Notably, its API Manager subscriptions continue to more than double each year; cloud services now contribute to more than 15 per cent of new revenue; and enterprises’ IoT services extend across a range of industries, from transportation to automotive, manufacturing, construction, healthcare, communications and smart cities. It will also use the financing to expand the company’s global operations in marketing, sales and support teams, as well as channel programmes.
 
Pacific Controls’ investment in WSO2 further extends the strategic relationship between the two companies. Pacific Controls has standardised on the WSO2 platform to build the next generation of its industrial IoT cloud platform, which enables manufacturers to IoT-enable any device – such as elevators, escalators and fans – to transform themselves into data-driven providers of products as a service. Additionally, the two companies are working jointly on Pacific Controls’ smart city initiative.
 
With the investment, Dilip Rahulan, executive chairman of Pacific Controls, has joined the WSO2 board as an observer.
 
“As a customer, we have experienced the unique advantage of WSO2’s comprehensive open source platform,” said Rahulan. “Using WSO2’s modular middleware products, built from the ground up to work together seamlessly, we have been able to accelerate our solution delivery and address the broad range of demands required to connect IoT with enterprise systems. Our own experience, coupled with the rapidly growing worldwide adoption of WSO2’s platform, made it clear that WSO2 has remarkable potential to reshape how enterprises adapt their applications and services to today’s demands. We are thrilled to invest in WSO2 and work with the company in building on its success.”
 
Toba Capital is a venture firm focused on enterprise software and infrastructure. It backs entrepreneurs building transformative businesses, both as an investor and as an on-going operational partner. The firm was founded by Vinny Smith, an early investor and former CEO of Quest Software.
 
“WSO2 has an exciting team of proven entrepreneurs, who are delivering real value to global enterprises that demand an agile solution for their mission-critical applications,” said Smith. “We continue to be impressed by the company’s ability to rapidly address new business and IT demands, which is translating into a strong increase in new customers and revenue streams. We are excited to extend our investment in WSO2, and we believe the company has tremendous potential for future growth.”