Israeli cybersecurity startup Wiz walks away from $23 billion Google deal, will pursue IPO

Israeli cybersecurity startup Wiz has unexpectedly ended talks with Google-parent Alphabet regarding a $23 billion acquisition deal and instead plans to pursue an IPO as previously planned, Reuters reported, citing an internal memo.

Wiz CEO Assaf Rappaport announced that the company would now refocus on its original plan for an initial public offering, with a target of reaching $1 billion in annual recurring revenue. “Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice,” Rappaport said in the memo.

Neither Alphabet nor Wiz have officially acknowledged the acquisition talks. The memo did not explicitly name Google or Alphabet, Reuters noted. Google did not immediately respond to requests for comment, while Wiz declined to comment.

“Wiz has walked away from a $23 billion deal to be bought by Google, in what would have been the search giant’s largest-ever acquisition, telling employees it would pursue an IPO as previously planned,” CNBC reported.

Last week, the Wall Street Journal reported that Google was close to finalizing the acquisition of Wiz for about $23 billion, citing sources familiar with the matter. This valuation was nearly double the $12 billion valuation Wiz announced in May after raising $1 billion in a private funding round.

The decision by Wiz to walk away from the deal marks a significant setback for Alphabet, following its recent decision to withdraw from a deal to acquire online marketing software company HubSpot. Had it proceeded, Wiz would have been Alphabet’s largest acquisition ever, and its second major investment in the cybersecurity space since its $5.4 billion purchase of Mandiant in 2022.

Wiz was founded in 2020 by four Israeli founders Yinon Costica, Ami Luttwak, Assaf Rappaport, and Roy Reznik. They sold their previous security startup company, Adallom, to Microsoft for a reported $320 million in 2015. The startup specializes in cloud-based cybersecurity solutions, leveraging artificial intelligence to help companies identify and mitigate critical risks on cloud platforms.

Wiz’s platform is used by 15% of Fortune 500 companies. The company has seen rapid growth under the leadership of CEO Assaf Rappaport. The company was considering an IPO as recently as May when it reached a valuation of $12 billion.

Wiz’s cloud security platform provides executives and cybersecurity professionals with comprehensive visibility into a company’s entire cloud infrastructure, making it an attractive option for large enterprises with extensive computing resources. The firm is backed by a lineup of prominent investors, including Israeli VC firm Cyberstarts, Index Ventures, Insight Partners, and Sequoia Capital.

We covered Wiz back in 2021 after the company raised $250 million in a private funding round, more than tripling its valuation to $6 billion, making it a new member of the highly-coveted unicorn club. While most tech companies are conducting layoffs, Wiz, instead, has grown its employee count from 65 in March 2021 to become a 700-person startup company.

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