Sundar
Pichai,
CEO
of
Alphabet
Inc.,
during
Stanford’s
2024
Business,
Government,
and
Society
forum
in
Stanford,
California,
April
3,
2024.
Justin
Sullivan
|
Getty
Images
Wiz
has
walked
away
from
a
$23
billion
deal
to
be
acquired
by
Google,
in
what
would
have
been
the
search
giant’s
largest-ever
deal,
telling
employees
it
would
pursue
an
initial
public
offering
as
it
initially
planned.
“Saying
no
to
such
humbling
offers
is
tough,”
Wiz
co-founder
Assaf
Rappaport
said
in
a
memo
obtained
by
CNBC
to
the
company’s
worldwide
employee
base.
A
person
familiar
with
the
company’s
thinking
cited
both
antitrust
and
investor
concerns
as
part
of
the
motivation
behind
the
decision
to
walk
away.
Rappaport
wrote
that
the
company
would
focus
on
its
next
milestones:
an
initial
public
offering
and
$1
billion
in
annual
recurring
revenue,
both
targets
which
the
company
had
been
eyeing
well
before
talks
had
been
reported.
The
deal
would
have
nearly
doubled
the
$12
billion
valuation
of
the
startup
from
its
most
recent
round
of
funding.
Wiz
was
founded
in
2020
and
has
grown
at
a
rapid
speed
under
Rappaport,
who
had
been
eyeing
an
IPO
as
recently
as
May.
Wiz’s
cloud
security
products
include
prevention,
active
detection
and
response
—
a
range
that
has
appealed
to
large
firms
and
would
have
helped
Google
compete
with
Microsoft
which
also
sells
security
software.
Alphabet’s
cloud
segment
has
been
under
pressure
to
grow
amid
competition
from
frontrunners
Microsoft
and
Amazon, something
the
Wiz
deal
would
have
helped
with. The
cloud
unit
reached
profitability
in
2023
after
years
of
hefty
investment.
While
Google
Cloud
has
seen
consistent
growth
in
recent
years,
the
company
and
its
CEO
Thomas
Kurian
faces
pressure
to
continue
growing
in
efforts
to
capture
business
during
the
AI
boom.
Google
did
not
immediately
respond
to
requests
for
comment.
Exits
in
technology
have
been
rare
this
year,
between
startups
waiting
for
more
receptive
markets
before
going
public
and
cash-rich
companies
fearing
they
wouldn’t
win
regulatory
clearance
for
transactions.
The
collapse
of
the
transaction
will
be
seen
as
a
disappointment
by
Index
Ventures,
Insight
Partners,
Lightspeed
Venture
Partners,
Sequoia
and
other
venture
firms
with
stakes
in
Wiz
that
have
raised
multibillion-dollar
funds
in
recent
years,
with
the
intent
of
giving
their
startups
enough
to
guarantee
success.
Funds
that
run
into
the
billions
require
exits
of
over
$10
billion
in
order
to
pay
off,
and
those
events
have
been
rare,
said
Brendan
Burke,
a
senior
analyst
at
PitchBook.
Intuit
bought
Mailchimp
for
$12
billion
in
November
2021.
Wiz
hit
$100
million
in
annual
recurring
revenue
after
18
months,
and
achieved
$350
million
in
annual
recurring
revenue
in
2023.
It’s
backed
by
a
roster
of
blue-chip
firms,
including
Israeli
venture
capitalist
Cyberstarts,
Index
Ventures,
Insight
Partners
and
Sequoia
Capital.
Wiz’s
founders
previously
built
security
startup
Adallom,
raised
money
from
Sequoia
and
Index
and
sold
the
startup
to
Microsoft
for
$320
million
in
2015.
Former
Sequoia
leader
Doug
Leone has
called investing
in
Wiz
in
its
earliest
days
“a
no-brainer.”
Soon
after
its
establishment,
Covid
started
spreading,
and
companies
rushed
to
adopt
cloud-based
software
and
infrastructure
to
help
employees
work
remotely.
The
shift
benefited
Wiz,
which
can
flag
security
issues
for
applications
and
data
on
the
Amazon,
Google,
Microsoft
and
Oracle
public
clouds.
The
startup
was
born
in
January
2020,
and
11
months
later,
it
announced
a
$100
million
funding
round.
“I
think
what
was
unique
with
Wiz
in
the
early
days
was
the
amount
of
money
raised
from
the
get-go,”
Sid
Trivedi,
an
investor
at
Foundation
Capital,
told
CNBC
in
an
interview.
Google
successfully
acquired
cybersecurity
firm
Mandiant
for
$5.4
billion
in
2022.
Google’s
largest
deal
remains
the
acquisition
of
hardware
maker
Motorola
in
2012
for
$12.5
billion,
which
it
ended
up
selling
to
Lenovo
for
$2.9
billion
in
2014.
As
recently
as
last
week,
Google
reportedly
ended
conversations
to
acquire
sales
software
maker
HubSpot.
In
an
interview
with
CNBC’s
Sara
Eisen
and
Carl
Quintanilla
at
the
New
York
Stock
Exchange
last
year,
Eisen
asked
Rappaport
if
he
wants
to
take
the
startup
public.
“Yeah,
definitely,”
he
said.
He
laughed.
“That’s
why
we’re
here.”
This
is
breaking
news.
Please
check
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for
updates.
