Wiz, Cyber security startup has reportedly declined a multi-billion dollar acquisition offer from Alphabet’s Google. Instead, they’ve chosen to go public with their company.
Following CNBC, it received a memo to Wiz employees from co-founder Assaf Rappaport, in which he demonstrated the decision to move out of the “humbling” $23 billion approach from Google.
Google’s approach to Wiz has been mentioned by different media outlets for weeks now, and if it had gone forward, it would have been Google’s most substantial acquisition ever.
Wiz rejection
Wiz rejection
It should be acknowledged that Google’s largest acquisition until now was the $12.5 billion purchase of Motorola Mobility in 20212, mostly because Mototrola’s patents were essential for the Android platform.
Motorola Mobility, which used to handle Motorola’s phones, was split from its main business division in December 2010.
However, Google sold Motorola to Lenovo for $2.9 billion in January 2014.
Google’s second-highest acquisition was buying the $5.4 billion cybersecurity veteran Mandiant in 2022.
But at present following the CNBC report, Google’s $23 billion proposal has been declined by the cybersecurity firm.
According to a staff memo obtained by CNBC, Wiz co-founder Assaf Rappaport wrote that “refusing such a humble offer is heavy.” A person close to Wiz’s concept, who asked namelessness to discuss personal matters willingly, stated the company weighed antitrust and investor worries as reasons for declining the deal.
According to the report, Rappaport wrote that the organization would focus on its next endeavors: going public for the first time and generating $1 billion in revenue every year
Wiz had been aiming both targets competently before talks with Google had been reported.
The deal would have almost doubled the startup’s value to $12 billion from its latest funding round, as noted by CNBC.
IPO Objectives
IPO Objectives
New York-founded Wiz was established in 2020 and has expanded quickly under Rappaport leadership. As recently as May, he had been targeting for an IPO.
Following CNBC, the company reached $100 million in annual recurring revenue in 18 months and reached $350 million last year.
Wiz’s cloud security products comprise prevention, active detection, and response, and are working toward cloud-based operations.
The objective of buying Wiz was to strengthen Alphabet’s position in the cloud computing market, which is currently dominated by Amazon Web Services and Microsoft.
Following CNBC, Google didn’t immediately reply to requests for comment.
HubSpot deal
Wiz was not the only company on Alphabet’s target recently.
At the beginning of the month Alphabet reportedly chose not to pursue an acquisition of HubSpot, due to heightened regulatory scrutiny of tech acquisitions for antitrust reasons.
That acquisition came about in April 2024 when reports surfaced that Alphabet was considering buying HubSpot to strengthen its position in CRM and cloud services.
Wiz: Great Future Without Google Acquisition
Wiz: Great Future Without Google Acquisition
Jay McBain, chief analyst at Canalys, said Wiz rejecting Alphabet’s offer reminds him of when Facebook CEO Mark Zuckerberg declined the $1-billion proposal from Yahoo and later exceeded a trillion dollars in worth.
Wiz has strong roots in an industry going ahead by double digits (for the anticipated future) and could influence public market capital in a way that Google wouldn’t provide,’ he said.
Matthew Ball, chief analyst at Canalys, said much of Wiz’s accomplishment has been in the Amazon Web Services (AWS) ecosystem.
“After the $1 billion funding round earlier this year, Wiz is well-resourced to keep executing its M&A strategy, work towards the direction of IPO and grow its value,” he said.
When asked about how Google’s acquisition would affect their partners, Canalys analyst Peter Bryan said that untangling the close relationships with other cloud providers would have been too challenging from an integration standpoint.
(Canalys is owned by Informa, which is the parent company of Channel Futures.)
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