Israeli Cybersecurity Startup Wiz Rejects Google's Record $23 Billion Takeover Offer!

Wiz, an Israeli cybersecurity startup, has decided to pursue an initial public offering (IPO) after turning down a potential $23 billion acquisition by Alphabet, Google's parent company. For Google this would have been it's biggest ever acquisition. The rejection of the substantial offer marks a significant pivot for Wiz, which aims to establish itself as a major independent player in the cybersecurity industry.

Wiz CEO Assaf Rappaport announced that the company will now shift its focus towards an initial public offering (IPO) and aims to achieve $1 billion in annual revenue.

"The buzz about a potential acquisition has been intense over the past week. While we are honored by the offers received, we have decided to continue building Wiz independently," Rappaport stated in the memo.

"Declining such significant offers is challenging, but I have confidence in our exceptional team to make this decision," he added.

Neither Alphabet nor Wiz had officially confirmed the acquisition talks, and the Wiz memo did not explicitly mention Google or its parent company.

Wiz's management, after seriously considering Google's proposal, chose to walk away in order to maintain the company’s independence and build it into one of the leading cybersecurity firms globally. Although potential antitrust review risks were considered, they were not the primary reason for the decision.

Earlier this month, it was reported that Alphabet was in advanced negotiations to acquire Wiz for around $23 billion.

Wiz’s decision to terminate the acquisition talks marks a setback for Google, which has been heavily investing in its cloud infrastructure and aiming to attract more clients to its cloud business, which generated over $33 billion in revenue last year.

This is the second recent challenge for Alphabet’s M&A efforts, following reports that it also decided against acquiring the online marketing software company HubSpot.

In March 2022, Alphabet acquired cybersecurity firm Mandiant for $5.4 billion as part of its strategy to enhance cyber threat management and strengthen its cloud computing business.

Wiz, founded in 2020 by alumni of Israel’s cyber intelligence unit, was valued at $12bn during a funding round in May that drew investors such as Andreessen Horowitz, Lightspeed Venture Partners and Thrive.

Wiz says 40% of Fortune 100 companies are its customers, and that it is making $350m in annual recurring revenue.

Wiz offers cloud-based cybersecurity solutions that help companies identify and mitigate critical risks on cloud platforms.