TLDR
- Google’s planned $23 billion acquisition of cybersecurity startup Wiz has fallen through.
- Wiz CEO Assaf Rappaport said the company will focus on an IPO and aim for $1 billion in annual recurring revenue.
- The deal would have been Google’s largest-ever acquisition.
- Antitrust concerns may have played a role in the deal’s collapse.
- Wiz provides cloud-based cybersecurity solutions and was valued at $12 billion in May.
The proposed $23 billion acquisition of Israeli cybersecurity startup Wiz by Google’s parent company Alphabet has fallen apart. This development, reported by multiple sources, marks the end of what would have been Google’s largest-ever acquisition.
Wiz, founded in 2020 by alumni of Israel’s elite signals intelligence Unit 8200, has quickly become a major player in the cybersecurity industry. The company provides cloud-based security solutions that help businesses identify and remove risks on cloud platforms using artificial intelligence.
Assaf Rappaport, CEO of Wiz, confirmed the end of acquisition talks in an internal memo to employees.
“While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,”
Rappaport wrote. He added that saying no to such “humbling offers” was tough, but expressed confidence in the company’s team and future prospects.
Instead of pursuing the acquisition, Wiz will now focus on its original plan of going public through an initial public offering (IPO). The company aims to achieve $1 billion in annual recurring revenue before its IPO, a significant increase from the $350 million in annualized revenue it reported earlier this year.
The collapse of the deal is a setback for Google, which has been investing heavily in its cloud infrastructure and cybersecurity capabilities. Google’s cloud business generated over $33 billion in revenues last year, and the acquisition of Wiz would have significantly boosted its offerings in this sector.
Reasons for the deal’s failure haven’t been officially disclosed. However, some sources suggest that antitrust concerns may have played a role. Google is already facing two antitrust suits from the U.S. Justice Department, and the acquisition of Wiz could have invited further scrutiny from regulators.
The potential acquisition had raised eyebrows due to its size. At $23 billion, the deal would have valued Wiz at nearly double its most recent valuation of $12 billion, which it achieved in a private funding round in May 2024. This rapid increase in valuation highlights the growing importance of cybersecurity in the tech industry.
Wiz’s decision to pursue an IPO instead of accepting the acquisition offer reflects confidence in its growth trajectory. The company has seen rapid expansion since its founding, growing from $100 million in annualized revenue two years ago to over $350 million today.
For Google, this marks the second recent setback in the M&A space, following reports of its decision to walk away from a deal for online marketing software company HubSpot. The tech giant’s last major cybersecurity acquisition was the $5.4 billion purchase of Mandiant in 2022.
The collapse of the Wiz deal also highlights the challenges facing big tech companies as they seek to expand through acquisitions. Regulatory scrutiny of such deals has intensified in recent years, with authorities in the U.S. and Europe taking a harder line on corporate consolidation in the tech sector.
Despite the deal falling through, the attention surrounding the potential acquisition has boosted Wiz’s profile in the cybersecurity market. Rappaport noted in his memo that the “market validation” following the news has reinforced their goal of “creating a platform that both security and development teams love.
