Alphabet, Google’s parent company, is reportedly back in advanced discussions to acquire cloud cybersecurity startup Wiz, this time at an even higher valuation. According to sources familiar with the matter, the potential deal now values Wiz at a staggering $30 billion, up from the previously rumored $23 billion last summer.
Leading the renewed acquisition efforts is Thomas Kurian, CEO of Google Cloud, who views Wiz’s cutting-edge cloud security solutions as a strategic addition to Google’s growing cybersecurity arsenal.
Wiz’s rapid growth and strong financial performance have undoubtedly kept Google interested. As of July 2023, Wiz reported an impressive annual recurring revenue (ARR) of $500 million. The company is ambitiously targeting $1 billion in ARR by 2025, according to previous reports.
A Price Tag That Reflects Wiz’s Explosive Growth
Should the deal finalize at $30 billion, it would mark a significant premium over Wiz’s recent valuations. The company last raised $1 billion in funding at a $12 billion valuation in May 2023. Later that year, an employee share sale pushed Wiz’s internal valuation to $16 billion.
This sharp increase reflects the surging demand for robust cloud security solutions, especially as more businesses migrate their operations to the cloud.
IPO Speculation Grows Amid CFO Appointment
While Wiz has publicly stated it has no plans to go public in 2025, industry watchers are reading between the lines. The company recently appointed Fazal Merchant—a seasoned executive with experience at DreamWorks and Tanium—as its new Chief Financial Officer (CFO). Moves like this often fuel speculation about potential IPO preparations, given CFOs typically help steer companies through major financial milestones.
Previous Deal Talks Stalled Over Integration and Regulatory Hurdles
Interestingly, last year’s acquisition talks reportedly fell apart over disagreements about Wiz’s future within Google. The Wall Street Journal revealed that the two companies couldn’t align on whether Wiz would operate independently or merge fully into Google Cloud.
Another major obstacle was the Biden administration’s heightened regulatory scrutiny over large-scale tech acquisitions. Sources indicated that regulatory pressure played a role in halting the previous deal.
Shifting Regulatory Climate Sparks M&A Resurgence
However, the landscape might be shifting. Some investors told The Business Hill that mergers and acquisitions (M&A) are picking up again, driven by optimism that new leadership at the Federal Trade Commission (FTC), under Chair Andrew Ferguson, may adopt a more flexible approach to major transactions compared to former Chair Lina Khan.
This renewed momentum could explain why Google is back at the table with Wiz, determined to secure the deal this time.
The Story Behind Wiz’s Meteoric Rise
Founded in 2020, Wiz is the brainchild of four Israeli entrepreneurs—all former military officers—who previously co-founded Adallom, a cloud security company snapped up by Microsoft for $320 million.
Headquartered in New York and Israel, Wiz has quickly risen to become a major player in cloud cybersecurity. The startup is backed by prominent venture capital firms, including Andreessen Horowitz, Cyberstarts, Index Ventures, Greenoaks, Insight Partners, and Sequoia Capital.
As of now, neither company has confirmed the deal publicly. A spokesperson for Wiz declined to comment on the ongoing negotiations.
If successful, this acquisition would significantly bolster Google Cloud’s cybersecurity capabilities, positioning it to better compete against AWS and Microsoft Azure in the lucrative cloud services market.
