#WizIPO #TechAcquisition #CloudSecurity
Wiz Walks Away from $23 Billion Deal with Google, Pursues IPO
I still remember the day Wiz decided to walk away from a $23 billion deal to be acquired by Google. It was a move that would have made Google’s largest-ever acquisition, but Wiz had other plans. In a memo to its global employee base, Wiz co-founder Assaf Rappaport explained that the company would instead focus on its initial public offering (IPO) and reaching $1 billion in annual recurring revenue.
Rappaport acknowledged that saying no to such a significant offer was tough, but the company had to prioritize its goals. The decision was influenced by both antitrust and investor concerns. Wiz’s rapid growth under Rappaport’s leadership had already led to a $12 billion valuation in its most recent funding round, and the company was determined to continue on its own path.
Wiz’s cloud security products, which include prevention, active detection, and response, have been highly successful and would have helped Google compete with Microsoft in the security software market. However, Google’s cloud segment has been under pressure to grow amid competition from Microsoft and Amazon, and the Wiz deal would have been a significant boost.
The collapse of the transaction is seen as a disappointment for venture firms like Index Ventures, Insight Partners, Lightspeed Venture Partners, and Sequoia Capital, which have invested heavily in Wiz. These firms were hoping for a major exit to pay off their multibillion-dollar funds.
Wiz’s founders previously built security startup Adallom, which was sold to Microsoft for $320 million in 2015. The company’s rapid growth, achieving $100 million in annual recurring revenue in just 18 months and $350 million in 2023, has been remarkable. Its cloud-based security solutions have been in high demand, especially during the COVID-19 pandemic when companies shifted to remote work.
In the end, Wiz’s decision to pursue an IPO reflects its commitment to its original goals and its confidence in its ability to succeed independently.
Original Article: https://www.cnbc.com/2024/07/23/google-wiz-deal-dead.html
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