Stanford, California – Wiz, a cloud security startup, has declined Google’s $23 billion acquisition offer, opting instead to pursue an initial public offering (IPO). This decision, revealed in a memo to employees by Wiz co-founder Assaf Rappaport, was driven by antitrust and investor concerns. The company aims to focus on achieving its goals of an IPO and reaching $1 billion in annual recurring revenue.
Founded in 2020, Wiz has experienced rapid growth under Rappaport’s leadership. The startup offers cloud security products such as prevention, active detection, and response, making it an attractive option for large companies. The potential acquisition by Google would have nearly doubled Wiz’s $12 billion valuation from its latest funding round.
Google’s cloud division, Alphabet, has been facing stiff competition from industry leaders like Microsoft and Amazon. The failed acquisition of Wiz was seen as an opportunity to boost Alphabet’s cloud segment, which turned profitable in 2023 after years of investment. The pressure to continue growing is mounting on Google Cloud and its CEO Thomas Kurian amid the ongoing AI boom.
The collapse of the acquisition deal is a setback for venture firms such as Index Ventures, Insight Partners, and Sequoia, which had high stakes in Wiz. These firms had been banking on exits of over $10 billion to generate returns for their multibillion-dollar funds. Despite the setback, Wiz has achieved significant milestones, including reaching $100 million and $350 million in annual recurring revenue within a short period.
Wiz’s founders, with a track record of success in the cybersecurity industry, have attracted investments from top venture capitalists. The startup’s growth has been fueled by the shift to cloud-based solutions during the pandemic, as companies sought secure options for remote work. Wiz’s ability to identify security issues across various cloud platforms has positioned it as a key player in the industry.
While Google’s acquisition attempts have not materialized, the tech giant continues to explore strategic investments in the cybersecurity sector. With the IPO in sight, Wiz is poised to make its mark as a prominent player in cloud security, catering to the evolving needs of businesses in the digital age.