Priya PatelTLDR:
Wiz, a cybersecurity startup, turned down a $23 billion acquisition offer from Google due to antitrust concerns and plans to pursue an IPO instead. The deal would have nearly doubled Wiz’s $12 billion valuation. Wiz has seen rapid growth since its launch in 2020, reaching $350 million in revenue in 2023. Alphabet, Google’s parent company, aimed to boost its cloud security products with the acquisition. Alphabet has been a conservative acquirer in the past, with its largest acquisition being Motorola Mobility for $12.5 billion in 2012. The failed deal with Wiz comes amidst ongoing antitrust lawsuits against Google by the Department of Justice.
Full Article:
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.
The successful startup reportedly weighed antitrust and investor concerns as reasons for abandoning the deal-in-progress, 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 Wiz was founded in 2020.
Wiz hit $100 million in annual recurring revenue after 18 months, and reached $350 million in 2023. The company has welcomed investments from big venture backers like Index Ventures, Insight Partners, Lightspeed Venture Partners, and Sequoia. The acquisition would have helped Alphabet boost its cloud security products as it aims to better compete with rival Microsoft. Alphabet’s cloud unit reached profitability in 2023 after years of financial investments.
Wiz saw rapid growth since its launch just before the pandemic, amassing funding and achieving significant revenue milestones. The startup’s founders’ previous company, Adallom, was acquired by Microsoft for $320 million in 2015. This failed deal with Alphabet comes amidst ongoing antitrust lawsuits against Google by the Department of Justice.
