Cybersecurity Startup Wiz Rejects Google's $23 Billion Acquisition Offer, Aims for IPO

What Is Wiz, the Startup Walking Away From Google's Largest Ever Acquisition?

Google offered to pay nearly twice Wiz's last private-market valuation. Cloud security software company Wiz has reportedly backed out of a deal with Google (GOOGL) that would have valued the company at $23 billion and been Google's largest acquisition to date. Instead, the just four-year-old startup is focusing on reaching $1 billion in annual recurring revenue and pursuing an initial public offering. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Over a decade ago, in 2012, Google acquired the hardware company Motorola for $12 billion, which remains its largest acquisition to date. Wiz was most recently valued just as much after raising $1 billion from Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital. Google offered almost twice its private-market valuation, or 60 times its annual revenue. "Saying no to such humbling offers is tough," Wiz co-founder and CEO Assaf Rappaport reportedly wrote in a memo to company employees, CNBC reported. In 2022, Wiz reported $100 million in annual recurring revenue in 18 months, a number that swelled to $350 million by early 2024. "The average deal size in cybersecurity has been around 10 times revenue. Google [being willing to pay] 60 times hints at its realization that, with more and more players in the cloud space and with almost everyone doing a generally horrible job at cybersecurity, it could offer them a strategic competitive advantage," Wayne Jackson, CEO at the software supply chain management platform Sonatype, told Observer. Wiz offers a robust cloud security platform that targets healthcare, life sciences, government and financial services industries. Its capabilities include vulnerability management, compliance, A.I. security posture management, Infrastructure as Code (IaC) scanning, least privilege management and more. Cloud security is the most pressing security discipline, above identity and A.I./ML engineering, according to the 2024 Cloud Security Study from Thales Group. In the survey, 44 percent of respondents said they had experienced a cloud data breach, and an average of 47 percent of cloud data is sensitive. This may explain why major companies, including Morgan Stanley, Slack, and Colgate-Palmolive, employ Wiz for cloud security purposes. The company's website says it's used by 40 percent of Fortune 100 companies. Wiz's withdrawal from the Google deal raises important questions about market dynamics and the regulatory environment. "As cloud security becomes increasingly critical, major acquisitions by dominant players like Google can lead to fears of reduced competition and innovation," Ganesh Pai, CEO and co-founder of the cloud security company Uptycs, told Observer. Pai said moving towards an IPO would set a benchmark for other companies in the space, potentially validating and sparking more investments and advancements across the cloud security industry. The news comes at a fragile moment for cloud security. Days after the CrowdStrike outage hit 8.5 million computers running on Windows systems -- resulting in thousands of delayed flights, tech outages at hospitals and digital banking going temporarily offline -- Wiz is taking the opportunity to solidify its place as a trusted source in cloud security. Crowdstrike stock lost nearly a quarter of its value in a single weekend following the incident. Founded by Rappaport, Ami Luttwak, Roy Reznik and Yinon Costic in 2020, Wiz seems to seek greener pastures, not those within the Google campus. All four co-founders are former employees of Microsoft (MSFT)'s research and development and cloud security departments.

What Is Wiz, the Startup Walking Away From Google's Largest Ever Aquisition?

Google offered to pay nearly twice Wiz's last private-market valuation. Cloud security software company Wiz has reportedly backed out of a deal with Google (GOOGL) that would have valued the company at $23 billion and been Google's largest acquisition to date. Instead, the just four-year-old startup is focusing on reaching $1 billion in annual recurring revenue and pursuing an initial public offering. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Over a decade ago, in 2012, Google acquired the hardware company Motorola for $12 billion, which remains its largest acquisition to date. Wiz was most recently valued just as much after raising $1 billion from Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital. Google offered almost twice its private-market valuation, or 60 times its annual revenue. "Saying no to such humbling offers is tough," Wiz co-founder and CEO Assaf Rappaport reportedly wrote in a memo to company employees, CNBC reported. In 2022, Wiz reported $100 million in annual recurring revenue in 18 months, a number that swelled to $350 million by early 2024. "The average deal size in cybersecurity has been around 10 times revenue. Google [being willing to pay] 60 times hints at its realization that, with more and more players in the cloud space and with almost everyone doing a generally horrible job at cybersecurity, it could offer them a strategic competitive advantage," Wayne Jackson, CEO at the software supply chain management platform Sonatype, told Observer. Wiz offers a robust cloud security platform that targets healthcare, life sciences, government and financial services industries. Its capabilities include vulnerability management, compliance, A.I. security posture management, Infrastructure as Code (IaC) scanning, least privilege management and more. Cloud security is the most pressing security discipline, above identity and A.I./ML engineering, according to the 2024 Cloud Security Study from Thales Group. In the survey, 44 percent of respondents said they had experienced a cloud data breach, and an average of 47 percent of cloud data is sensitive. This may explain why major companies, including Morgan Stanley, Slack, and Colgate-Palmolive, employ Wiz for cloud security purposes. The company's website says it's used by 40 percent of Fortune 100 companies. Wiz's withdrawal from the Google deal raises important questions about market dynamics and the regulatory environment. "As cloud security becomes increasingly critical, major acquisitions by dominant players like Google can lead to fears of reduced competition and innovation," Ganesh Pai, CEO and co-founder of the cloud security company Uptycs, told Observer. Pai said moving towards an IPO would set a benchmark for other companies in the space, potentially validating and sparking more investments and advancements across the cloud security industry. The news comes at a fragile moment for cloud security. Days after the CrowdStrike outage hit 8.5 million computers running on Windows systems -- resulting in thousands of delayed flights, tech outages at hospitals and digital banking going temporarily offline -- Wiz is taking the opportunity to solidify its place as a trusted source in cloud security. Crowdstrike stock lost nearly a quarter of its value in a single weekend following the incident. Founded by Rappaport, Ami Luttwak, Roy Reznik and Yinon Costic in 2020, Wiz seems to seek greener pastures, not those within the Google campus. All four co-founders are former employees of Microsoft (MSFT)'s research and development and cloud security departments.

Cloud security startup Wiz walks away from $23B Google acquisition on...

Cloud security startup Wiz has reportedly walked away from talks to be acquired by Google parent Alphabet for $23 billion - a deal which would have been the search giant's largest acquisition to date. Wiz CEO Assaf Rappaport told employees the company will instead pursue an initial public offering, which he previously said last year. "Saying no to such humbling offers is tough," Rappaport wrote in a memo to employees obtained by CNBC. The successful startup reportedly weighed antitrust and investor concerns as reasons for abandoning the deal-in-progress, an anonymous source told CNBC, as the Department of Justice has hit Google with two antitrust lawsuits. The deal would have nearly doubled the startup's $12 billion valuation - a valuation that skyrocketed soon after Rappaport and a handful of colleagues founded Wiz in 2020. The security startup hit $100 million in annual recurring revenue after 18 months, and reached $350 million in 2023, according to The Wall Street Journal. Wiz has welcomed investments from big venture backers, including Index Ventures, Insight Partners, Lightspeed Venture Partners and Sequoia, according to CNBC. The acquisition would have helped Alphabet boost its cloud security products as the company aims to better compete with rival Microsoft. Alphabet's cloud unit reached profitability in 2023 after years of financial investments, according to CNBC. The company's cloud computing services - called Google Cloud - have grown in recent years as companies race to keep up with the AI boom. Meanwhile, Wiz saw rapid growth since the cloud software company launched just before the pandemic - when demand for cloud security spiked as companies pivoted to widespread remote work. The startup raked in funding - announcing a $100 million funding round less than a year after its creation, according to CNBC. The Wiz founders' previous startup, security company Adallom, was backed by Sequoia and Index before being acquired by Microsoft for $320 million in 2015. Alphabet has been a conservative acquirer ahead of the reportedly failed Wiz deal. Its largest acquisition was its $12.5 billion deal with Motorola Mobility in 2012. Its second-largest acquisition was security company Mandiant for $5.4 billion two years ago. The company acquired Fitbit for $2.1 billion in 2021, as well as completing YouTube, DoubleClick, Looker and Waze deals over the years. Google is currently awaiting a verdict in a Justice Department antitrust lawsuit that alleges the company maintained an illegal monopoly over the search market. The DOJ last year filed a second antitrust lawsuit which has yet to go to trial, that alleges Google monopolized digital ad technologies.

Wiz Declines Google's $23 Billion Buyout, Eyes IPO And $1B Revenue Goal

Israeli cybersecurity company Wiz has turned down Google's $23 billion acquisition offer, which would have marked the tech giant's largest purchase to date. The startup is opting instead to proceed with plans for an initial public offering (IPO), according to CNBC. In a memo to employees, Wiz co-founder Assaf Rappaport acknowledged the difficulty of declining such a significant offer. Sources close to the company mentioned concerns about antitrust issues and investor apprehensions as key factors in the decision, the report said. Rappaport said Wiz would now concentrate on achieving its next goals: launching an IPO and reaching $1 billion in annual recurring revenue. These objectives had been on the company's radar well before any discussions with Google began. The proposed deal would have significantly increased Wiz's valuation, almost doubling it from the $12 billion figure from its latest funding round. Founded in 2020, Wiz has seen rapid growth under Rappaport's leadership, aiming for an IPO as recently as May. The company reached $100 million in annual recurring revenue within 18 months and hit $350 million last year. Wiz offers cloud security solutions that include prevention, active detection, and response, making it an attractive option for large enterprises and positioning it as a potential competitor to Microsoft's security software. Google's cloud division, Alphabet's cloud segment, has been facing stiff competition from Microsoft and Amazon. Despite achieving profitability in 2023 after years of significant investment, the division, led by CEO Thomas Kurian, is under pressure to maintain its growth, especially amid the AI boom. The failed deal is likely to be a setback for venture capital firms such as Index Ventures, Insight Partners, Lightspeed Venture Partners, and Sequoia, which have invested heavily in Wiz. The founders of Wiz, who previously built and sold the security startup Adallom to Microsoft for $320 million in 2015, have a strong track record. Early investment in Wiz was seen as an obvious choice by former Sequoia leader Doug Leone. Wiz benefited from the pandemic-driven shift to cloud-based solutions, enabling companies to support remote work. The startup quickly raised $100 million less than a year after its inception. Google's acquisition history includes the $5.4 billion purchase of cybersecurity firm Mandiant in 2022 and its largest acquisition to date, the $12.5 billion purchase of Motorola in 2012, though Google later sold Motorola assets to Lenovo for $2.9 billion in 2014. Recently, Google ended talks to acquire sales software maker HubSpot.

Wiz Reportedly Rejects $23 Bln Offer From Google, To Pursue IPO

(RTTNews) - Cybersecurity firm Wiz, which had been in advanced talks to be acquired by tech major Google's parent Alphabet Inc., walked away from the $23 billion offer, and now would pursue its original plan of an Initial public offering, reports said. Wiz co-founder and CEO Assaf Rappaport wrote in a memo that "Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice." As per reports, antitrust and investor concerns, among others, are cited to be the reasons for abandoning a potential deal. The Wall Street Journal recently reported, citing people familiar with the matter, that Alphabet was in advanced talks to buy Wiz, which would have been Google's largest ever acquisition. In the memo, the CEO now stated that the company would focus on its next milestones of an IPO as well as $1 billion in annual recurring revenue. Rappaport had been targeting an IPO as recently as May, before getting the offer from Google. Rappaport earlier had said that, "Regarding a potential IPO, we are not rushing into it -- we have previously indicated that we would move ahead once we reach $1 billion ARR." The New York-based cloud security startup Wiz was founded in January 2020 by Rappaport, Yinon Costica, Ami Luttwak and Roy Reznik. The company's platform analyzes computing infrastructure hosted in AWS, Azure, GCP, OCI, and Kubernetes for combinations of risk factors. It helps companies identify and remove critical risks on cloud platforms, powered by artificial intelligence. The company had reached $100 million in annual recurring revenue after 18 months of founding, and reached $350 million in annual recurring revenue in 2023. A deal with Google, if successful, would have nearly doubled the $12 billion valuation of the startup from its most recent round of funding in May, when it raised $1 billion. The latest funding round was led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital. Rappaport then had stated that Wiz expects 2024 to be a year of consolidation in cybersecurity and that it would use the round to fund acquisitions as well as for product and talent development. Earlier in the year, Wiz acquired Gem Security, a cloud detection and response company, and also signed a letter of intent to acquire cybersecurity startup Lacework. Meanwhile, the company's founders had sold their first startup, Adallom, to Microsoft in 2015. Google has been investing in its cloud infrastructure. In 2022, Google acquired cybersecurity company Mandiant for $5.4 billion. Meanwhile, the company recently rejected a deal for online marketing software company HubSpot. Its largest deal so far was the purchase of hardware maker Motorola in 2012 for $12.5 billion. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Wiz reportedly ends $23B acquisition talks with Google - SiliconANGLE

Wiz Inc. has reportedly ended discussions with Google LLC about an acquisition that could have valued the cybersecurity startup at $23 billion. The Wall Street Journal and CNBC reported the development today, citing an internal Wiz memo. Chief Executive Officer Assaf Rappaport (pictured, second from the left) wrote in the note that "saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice." Wiz will now reportedly shift its focus to laying the groundwork for an initial public offering. In May, Rappaport told the Journal that the cybersecurity company hopes to achieve annual recurring revenue of $1 billion before listing its shares. Wiz's annual recurring revenue is reportedly already above $500 million, up from $350 million last year and $100 million in August 2022. The company's rapid sales growth is likely one of the reasons behind the steep price it was expected to fetch from Google. The $23 billion that the search giant could have reportedly paid is nearly twice the valuation that Wiz received after its most recent funding round, a $1 billion raise it announced in May. Including that investment, the cybersecurity provider has raised a total of $1.9 billion from investors to date. A source told CNBC that "antitrust and investor concerns" factored into Wiz's decision not to sell. Google is currently facing an antitrust lawsuit in the US, as well as a European Union probe into its compliance with the bloc's tech industry regulations. Wiz executives may have been concerned that an acquisition would have struggled to receive approval from antitrust officials. Since launching in 2020, Wiz has built a broad cloud security platform that combines several breach prevention tools into a single product. The software scans cloud environments for vulnerabilities as storage buckets that can be accessed over the open web. It also spots attempts by hackers to exploit those vulnerabilities and provides features for several related tasks, such as ensuring a company complies with GDPR data privacy regulation. Wiz can find security issues in not only cloud instances but also other off-premise technology assets. The platform detects security issues in serverless functions, snippets of code that run without much of the software scaffolding needed for traditional applications, and container registries. A container registry is a kind of internal app store that a company's developers use to share frequently used software components. Wiz provides automation workflows that promise to reduce the amount of time involved in tackling breaches. According to the company, those workflows speed up tasks such as collecting technical data about a cyberattack. The end result is a reduction in the amount of time necessary to remove malware from cloud environments . For securing cloud-based artificial intelligence models, Wiz provides a suite of features known as AI-SPM. It can detect cases when employees have unnecessarily broad access to an AI model's source code. AI-SPM also spots other issues, such as misconfigured security settings that may make an instance with AI training data susceptible to hacking. Wiz says that its platform is used by more than 40% of the Fortune 500. According to the company, those customers run 230 billion cybersecurity scans every day across five million cloud workloads. The acquisition of Wiz wouldn't have been Google's first major purchase in the cybersecurity market. In 2022, the search giant bought cybersecurity services provider Mandiant for $5.4 billion. Mandiant, which now operates as a unit of Google Cloud, helps companies detect and remediate breaches.

Google's $23 Billion Wiz Acquisition Deal Has Dissolved: Report

The discussions have fallen apart as Wiz seeks to remain independent, Wiz's CEO reportedly told employees Monday. Google's bid to acquire Wiz has disintegrated as the cloud security vendor seeks to remain independent, Wiz's CEO reportedly told employees Monday. Last week, multiple media reports pointed to advanced talks around Google parent Alphabet acquiring Wiz for $23 billion, which would have been the company's largest acquisition to date. Now, however, the Wall Street Journal is reporting that the talks to acquire Wiz have dissolved. Wiz Co-founder and CEO Assaf Rappaport told employees in an email Monday that the fast-growing company has "chosen to continue on our path to building Wiz," according to the email seen by the Journal. [Related: Google Cloud Earnings Preview: Microsoft, Wiz, CrowdStrike Take Center Stage] CRN has reached out to Google and Wiz for comment. Founded in 2020, Wiz has seen surging growth essentially from the get-go with its offering that accelerates the delivery of visibility and security for cloud environments. More recently, Wiz has also doubled down on providing native AI security capabilities with its AI-SPM (AI security posture management) offering. Wiz reached $100 million in annual recurring revenue (ARR) by mid-2022 and, earlier this year, said its ARR had surpassed $350 million. The reported acquisition price tag would have been nearly twice the $12 billion valuation that Wiz had achieved in May, in connection with raising $1 billion in new funding. In February, Rappaport told CRN that the company was eyeing an initial public offering and that it may not take as long to achieve as some might think. "We want to be a public company. So that's our overall goal. I would say when we've reached probably $1 billion in ARR, that would be when we should be thinking more seriously about IPO," he said in the February interview. But with a number of recent moves including several major executive hires, "I think that's around the corner," Rappaport said at the time. Antitrust actions by the U.S. government and European authorities have increased against tech giants Google, AWS and Microsoft in recent years, a factor that had also hung over the potential Google-Wiz deal.

Wiz Reportedly Rejects $23 Billion Google Deal

Instead, the company will go ahead with plans for an initial public offering (IPO), CNBC reported late Monday (July 22), citing an internal memo written by Wiz co-founder Assaf Rappaport "Saying no to such humbling offers is tough," Rappaport wrote. A source familiar with Wiz's thinking pointed to investor and antitrust concerns as part of the company's reason for walking away from the deal. The memo said Wiz will now focus on its IPO and reaching $1 billion in yearly recurring revenue, which CNBC says had been its targets before the news of its discussions with Google emerged earlier this month. The deal would have been Google's largest ever acquisition, while also almost doubling Wiz's valuation from the $12 billion it achieved with its last funding round in May. Wiz's cloud security offering, the CNBC report notes, would have helped Google compete with the likes Microsoft and Amazon in the cloud space. These efforts are happening as regulators are pushing for stronger cloud security protections, as noted here last week, PYMNTS has been monitoring the rapid evolution of the cyber threat landscape, spotlighted by the number of attacks this summer. Among the incidents was the theft of a "significant volume of data" stolen last month from at least 165 customers of multi-cloud data warehousing platform Snowflake -- in which the personal information from "nearly all" of AT&T's wireless customers was stolen. "This heightened emphasis on cybersecurity coincides with a broader debate surrounding data security in the connected economy, particularly in connected workplaces and smart homes, where the growing use of connected devices highlights new vulnerabilities, given the vast amounts of personal data they gather," PYMNTS wrote earlier this month. Meanwhile, the PYMNTS Intelligence report "Fraud Management in Online Transactions" found that 82% of eCommerce merchants suffered cyberattacks or data breaches in the past year, with 47% saying the incidents cost them both revenue and customers. As noted here earlier this month, the ongoing breaches showcase the need for businesses to shift from a purely preventive approach to one that balances prevention with robust response and recovery. "It is essentially an adversarial game; criminals are out to make money, and the [business] community needs to curtail that activity. What's different now is that both sides are armed with some really impressive technology," Michael Shearer, chief solutions officer at Hawk AI, said in an interview with PYMNTS.

Why this Israeli startup said no to Google's $23 billion acquisition offer - Times of India

Google-parent Alphabet's plans to acquire cybersecurity startup Wiz have reportedly fallen through. The Israeli company is said to have said no to the acquisition, which the media reports pegged at $23 billion. Had the deal proceeded, it would have been Google's largest-ever acquisition to date. In a memo to its employees, Wiz CEO Assaf Rappaport wrote why the company didn't go ahead with the deal. Why Wiz decided to call off the 'Google deal' In the memo seen by The Guardian, Rappaport wrote: "I know the last week has been intense, with the buzz about a potential acquisition. While we are flattered by the offers we have received, we have chosen to continue on our path to building Wiz. Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice. The market validation we have experienced following this news only reinforces our goal - creating a platform that both security and development teams love." Rappaport also said that Wiz will focus on its next milestones -- an initial public offering and $1 billion in annual recurring revenue. The company had been reportedly eyeing both targets well before talks with Google had been reported. Meanwhile, another person familiar with Wiz's decision (who requested anonymity) reportedly told CNBC that the company considered anti-trust and investor concerns as the reasons for abandoning the potential deal with Google. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.

Wiz rejects $23bn Google acquisition offer opting for IPO | bobsguide

In a surprising turn of events, cybersecurity firm Wiz has firmly declined Alphabet's $23 billion acquisition offer, opting instead to chart its own course towards an IPO. The rejection, announced by Wiz's CEO Assaf Rappaport, has sent shockwaves through the tech industry, leaving analysts and investors speculating on the motivations behind this bold move. Alphabet, the parent company of Google, had set its sights on Wiz as a strategic addition to its cloud security portfolio. The $23 billion acquisition offer would have been the largest in Google's history, doubling the $12 billion valuation that Wiz achieved in its last fundraising round in May. This offer represented a strategic move for Google to bolster its cloud security capabilities, positioning itself more competitively against industry giants. With Amazon and Microsoft dominating the space, Alphabet saw Wiz's cutting-edge technology as a game-changer. The acquisition would have significantly enhanced Google's cybersecurity portfolio, complementing its previous acquisitions of Mandiant for $5.4 billion and Siemplify for $500 million. Despite the lucrative nature of the offer, Wiz's leadership, led by CEO Assaf Rappaport, decided to stay the course with their original plan of pursuing an IPO. "While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz," Rappaport wrote in an internal note sent to company's 1,200 employees on Monday. The potential for a protracted regulatory approval process was one of the contributing factors to Wiz's decision to reject Alphabet's $23 billion offer. Given the increasing scrutiny on Big Tech acquisitions, particularly those involving market leaders like Google, the deal could have faced significant antitrust challenges. Google is already entangled in multiple lawsuits from the US Justice Department, accusing it of abusing its dominant position in search and digital advertising. Additionally, Wiz's leadership believes that an IPO would allow Wiz to retain control over its destiny. Going public would provide the necessary capital infusion to fuel further innovation and expansion, without compromising the company's vision. "The market validation we have experienced following this news only reinforces our goal - creating a platform that both security and development teams love," Rappaport wrote in the memo. "We are grateful for the faith our employees, investors, and customers have in us as we build the best cybersecurity company in the world." Wiz's decision to reject Alphabet's offer is a clear indication of its ambitious future plans. Rappaport has outlined the company's next milestones: reaching $1 billion in annual recurring revenue and pursuing an initial public offering. This aims to capitalise on the company's rapid growth and market validation. Since its founding in 2020, has already made significant strides, quickly establishing itself as a leader in the cloud security market. The company's innovative tools for scanning infrastructure and software for security threats have attracted a substantial customer base, including 40% of Fortune 100 companies. With $350 million in annual recurring revenue and a recent $1 billion funding round, Wiz is well-positioned for continued expansion. The company's strategic acquisitions, such as Gem Security and Raftt, further enhance its comprehensive security offerings, solidifying its market position and paving the way for a successful IPO. By going public, Wiz aims to solidify its position as a leading independent cybersecurity firm, providing innovative solutions that address the evolving security needs of enterprises worldwide. Wiz's decision to pursue an IPO is poised to attract considerable attention from investors and market analysts, given the company's rapid growth and substantial market impact. The company had previously signalled its plans for an IPO once it achieved specific financial milestones, a goal that now appears imminent as it continues to expand its client base and revenue streams. For Alphabet and Google the failed acquisition represents a setback. Alphabet's interest in acquiring Wiz is part of its broader strategy to fortify its cybersecurity portfolio, address the growing cybersecurity threats and enhance Google Cloud's offerings. Despite this, Google continues to make strides in the cloud security market, leveraging its Gemini AI model to help clients analyse threats. The rejection of the deal indicates Wiz's confidence in its market position and growth potential, as well as the robust health of the cybersecurity market, which continues to attract significant investment.

Cybersecurity firm Wiz rejects $23bn bid from Google parent Alphabet

Israeli company aims for stock market flotation after spurning biggest deal in tech group's history The cybersecurity firm Wiz has turned down a $23bn (£18bn) takeover bid from Google's parent Alphabet, spurning what would have been the tech company's biggest ever acquisition and seeking a stock market flotation instead. Alphabet had been in talks with Wiz, founded by alumni of Israel's cyberintelligence unit, as it seeks to catch rivals Microsoft and Amazon in the hyper-competitive cloud services market. Wiz offers a service that scans the data on cloud storage providers such as Amazon Web Services and Microsoft Azure for security risks. The New York-based startup, which has the backing of investors including Sequoia Capital and Thrive Capital, was most recently valued at $12bn. "While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz," the company told employees in an internal email. In a memo the Wiz chief executive, Assaf Rappaport, outlined the company's next targets of reaching $1bn in annual recurring revenue and an initial public offering. "Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice," he said. "The market validation we have experienced following this news only reinforces our goal - creating a platform that both security and development teams love." Neither Wiz nor Google had released official statements about the termination of the deal talks by Tuesday morning. There has been scepticism that the deal would pass regulatory scrutiny, as regulators seek to toughen their stance against big tech dealmaking. In December, Adobe abandoned its $20bn takeover of its smaller rival Figma, after European and UK regulators raised concerns that it would eliminate competition in the product design software market. Last month, the US Department of Justice and the Federal Trade Commission a deal on investigations into the main protagonists in the AI market, including Microsoft, OpenAI and Nvidia. Wiz, founded in 2020, was valued at $12bn during a funding round in May that drew investors such as Andreessen Horowitz, Lightspeed Venture Partners and Thrive. Wiz says 40% of Fortune 100 companies are its customers, and that it is making $350m in annual recurring revenue.

Wiz Saying 'No' To Google Was The Right Move: Analysis

The company has a rare opportunity ahead: To become the next cybersecurity giant. Yes, $23 billion is a lot of money to turn down. But in spurning Google's acquisition offer, I believe Wiz is positioning itself for something even bigger -- and even rarer to achieve -- in the cybersecurity industry. Given the stunning growth of the cloud security vendor in just over four years of existence, it had frankly been a head-scratcher to me why Wiz CEO Assaf Rappaport (pictured) would entertain an acquisition offer at this point, regardless of how generous Google was willing to be. Plus, not only did Wiz hire a new president in February, with the addition of ex-Zscaler COO Dali Rajic, but the company has continued to build out its executive ranks in recent months. Just a month ago, for instance, Wiz brought aboard a new channel chief with the hire of security veteran Michelle Hartley Graff. The company's $1 billion funding round, which closed not even three months ago, is another data point to keep in mind here. In my view, these are not the actions of a company preparing to imminently shop itself around. Indeed, with the disclosure of an internal email from Wiz's CEO to staff Monday, it's now apparent that the company was not actually looking to be acquired. The email suggests that Google's offer was an unsolicited bid. "While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz," Rappaport, who is also a co-founder of Wiz, told employees in the email Monday. Rappaport made clear in the email that Wiz has its sights set on reaching $1 billion in annual recurring revenue (ARR) and going public, two milestone goals he had earlier mentioned to me during an interview back in February. "We want to be a public company. So that's our overall goal," he said in the February interview with me. "I would say when we've reached probably $1 billion in ARR, that would be when we should be thinking more seriously about IPO." But with the series of recent moves by Wiz including the major executive hires, "I think that [$1 billion in ARR] is around the corner," Rappaport told me at the time. Now we know that, even with all the buzz from Google proposing its largest acquisition ever, Wiz has opted to stick to the previous plan. And I believe it's the right move. Wiz got a fast start coming out of the gates in early 2020 and has not slowed its pace since. The company's technology for quickly improving visibility into cloud environments has made a huge impact in the security industry, practically from the beginning. And Wiz is now considered a top player in AI security, as well. Earlier this year, Wiz said its ARR had surpassed $350 million, and the Wall Street Journal has reported that its ARR has now reached $500 million. (I've reached out to Wiz for comment.) As increasingly crucial as cybersecurity has become in recent years, these are still not the sort of growth numbers that any other security vendors are putting up. Wiz has been in a class of its own over the past four years and clearly believes it can stay that way over the longer term. From my vantage point at least, Wiz has one of the rarest opportunities in the industry. Wiz is on track to become the next cybersecurity giant, joining the ranks of Palo Alto Networks, Fortinet and CrowdStrike (yes, that CrowdStrike). Wiz doesn't need Google's help to get there. In all likelihood, the company would have only been slowed down by the M&A and integration process. As Rappaport told staff this week, remaining a standalone security vendor and reaching the IPO milestone is the path that makes the most sense for Wiz to achieve its massive potential. Turning down billions is not something that most security vendors would, or even could, do. But the simple fact is this: Wiz is not most security vendors.

Google's Aborted Deals Show Antitrust's Long Shadow Over Tech

(Bloomberg) -- In recent months, Google showed interest in two companies, either of which would have been the biggest-ever purchase for the internet giant. And both times, the deals fell apart. On Monday, the chief executive of Wiz Inc. told staff that the cybersecurity startup would reject a $23 billion offer from Alphabet Inc.'s Google and instead pursue an initial public offering. That came just weeks after Google shelved plans to buy HubSpot Inc., a $25 billion software firm. A large reason the advanced talks between Google and Wiz failed, according to people familiar with the situation: a faulty software update from CrowdStrike Holdings Inc. that caused Microsoft Windows to crash on millions of devices around the world. That episode increased interest in -- and the potential value of -- companies that offer cloud security features, like Wiz, said the people, asking not to be identified discussing private matters. But also looming over both of Google's failed deals was the specter of antitrust. Google has faced a litany of monopoly cases around globe over the last decade, with scrutiny growing even after the company stopped pursuing as many deals. Now that Google is back on the market, it's once again dealing with the regulatory pressures that have scuttled multiple high-profile tech purchases in the past year. In the US and Europe, competition authorities have increasingly zeroed in on the tech sector for its economic sway and market power. European regulators have forced potential deals to undergo months of reviews, and Lina Khan, chair of the US Federal Trade Commission, has aggressively gone after Silicon Valley in a way her agency never did before. Wiz turned down the deal partly over concerns it would lead to a protracted approval process, Bloomberg News previously reported. One of the last big proposed tech takeovers -- Adobe Inc.'s $20 billion overture to web design startup Figma -- fell apart at the end of 2023 after clashes with regulators in the UK and Europe. A month later, Amazon.com Inc. dropped its bid to buy Roomba-maker iRobot for similar reasons. Amazon's abandoned bid "spooked a lot of people," said Stefan Slowinski, global head of software research at BNP Paribas Exane. "Lina Khan had the impact of preventing some large M&A just by being present." Those aborted deals followed an intense FTC probe over Big Tech's AI investments, and Microsoft Corp.'s lengthy, albeit successful, fight to get UK regulators to sign off on its purchase of Activision Blizzard. "The first thing I thought of when I saw the CrowdStrike news was 'Oh, the 23 billion valuation for Wiz has just gone up a little bit,'" said Slowinski. Still, if the Wiz deal had gone through, analysts think it would likely have been exposed to prolonged antitrust scrutiny, like most of Google's recent large deals. Spokespeople for Google and Wiz declined to comment. In its first two decades, Google built many of its core properties, like YouTube and Android, through acquisitions, making gutsy bets on unproven technologies that ended up giving the company footholds in mobile computing, video and artificial intelligence. After spending $3.2 billion on Nest, a connected-device manufacturer, in 2014, Google effectively stopped cutting big checks for consumer companies. Its last major move in that category -- the $2.1 billion takeover of Fitbit Inc. proposed in 2019 -- took over a year to clear regulatory hurdles. More recently, Google has focused its corporate development strategy on its cloud business. Under Thomas Kurian, Google's cloud chief, the unit has aggressively expanded its sales forces and product lines in order to compete with Amazon Web Services and Microsoft. In 2019, a year after Kurian joined Google, the company agreed to spend $2.6 billion for cloud software firm Looker, and three years later, Google dropped $5.4 billion on cloud security provider Mandiant. Still, Google remains a distant third in the cloud market -- a fact that the company likes to point to when dismissing claims that it's a monopoly threat in the sector. Google never entered into detailed due diligence conversations with HubSpot, which provides customer management software, according to people familiar. But had the deal gone through, it would have immediately threatened HubSpot's leading competitor Salesforce Inc., given Google's "financial strength and AI expertise," according to a report from Bloomberg Intelligence. An acquisition of Wiz, meanwhile, would have dwarfed Google's previous deals. Wiz sells technology that scans data stored in public clouds for potential security risks. The company would have been a natural fit for Kurian's cloud division and would have helped Google's cloud unit in a field where it lags behind competitors, people familiar with Google's strategy said. But that possibility evaporated when Wiz CEO Assaf Rappaport told staff that the startup would focus on hitting $1 billion in annual recurring revenue and target an IPO, according to a memo viewed by Bloomberg News. The company declined to comment further. Figma, the design startup, also said it would pursue an IPO after its Adobe deal fell through. Such announcements have reassured startup investors who have seen very few lucrative exits lately, and been shaken by watching regulators tank promising deals. "With IPOs, you're the captain of your own destiny," said Haakon Overli, a partner with Dawn Capital, an enterprise software investing firm. At the same time, many venture capitalists have accepted that selling a company to one of the larger tech firms will inevitably invite attention from antitrust busters, Overli added. "It's a known unknown."

Wiz turning down Google acquisition opens door for Microsoft M&A, Wedbush says

Cybersecurity startup Wiz has reportedly rejected a $23B offer from Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and will instead focus on generating $1B in annual recurring revenue and eventually going public. While that deal may be off the table, it could open the door for Microsoft (NASDAQ:MSFT) to make an acquisition of its own in the cybersecurity space. "We ... believe for Microsoft as well as Google and Amazon, the CrowdStrike disaster outage since Friday has further highlighted the interconnected nature of cyber security software and the cloud ecosystem," analyst Dan Ives wrote in an investor note. As such, the lack of a deal between Google and Wiz could "start an M&A cycle as large cloud and tech stalwarts look to acquire cyber security software within their broader product portfolio." Microsoft could be one of the companies that could look to make a deal in the cybersecurity space sometime in the next 12 to 18 months, given that "consolidation is overdue," Ives added. More on big tech 3 Things Dividend Investors Need To Know About Google Before Earnings Google: The Pros And Cons For A Post-Q2 Share Price Surge Google Q2 Preview: Becoming The AI Leader Microsoft gains as Piper Sandler boosts price target on cloud, AI strength Wiz turns down Google's $23B acquisition deal - report