Wiz rejects Google’s $23 billion takeover in favor of IPO
Cybersecurity startup Wiz has turned down a $23 billion takeover bid from Google, breaking off what would have been the largest acquisition in the search giant’s history.
In a surprising turn of events, cybersecurity firm Wiz has rejected a staggering $23 billion acquisition offer from Alphabet, the parent company of Google. Instead, Wiz co-founder Assaf Rappaport announced in an internal memo that the company is opting to pursue an initial public offering (IPO). This decision marks a significant missed opportunity for Google, as the acquisition would have been the largest in its history, surpassing Wiz's previous valuation of $12 billion.
Rappaport acknowledged the difficulty of turning down such a substantial offer in his memo to Wiz employees. Nevertheless, the company remains focused on its original goals. Wiz will now strive to achieve $1 billion in annual recurring revenue alongside its IPO plans, targets that were set prior to their discussions with Google. Interestingly, neither Wiz nor Alphabet have publicly confirmed the details of the potential deal.
Wiz's appeal lies in its cloud-based security solutions tailored for enterprise customers. Acquiring Wiz could have bolstered Google's competitiveness against industry leaders like Microsoft and Amazon. However, the deal's potential antitrust implications and investor concerns likely played a role in Wiz's decision to walk away. With the US Justice Department already pursuing two antitrust lawsuits against Google regarding its search engine and digital advertising practices, adding a significant cybersecurity acquisition to the mix could have invited further regulatory scrutiny.
Google has shown a recent interest in expanding its cybersecurity capabilities, as evidenced by its 2022 acquisitions of Siemplify and Mandiant for $500 million and $5.4 billion, respectively. Mandiant, in particular, gained prominence for its role in exposing the SolarWinds hack. Despite missing out on Wiz, Google's continued investments in cybersecurity indicate its commitment to strengthening its position in this critical domain.
Rappaport acknowledged the difficulty of turning down such a substantial offer in his memo to Wiz employees. Nevertheless, the company remains focused on its original goals. Wiz will now strive to achieve $1 billion in annual recurring revenue alongside its IPO plans, targets that were set prior to their discussions with Google. Interestingly, neither Wiz nor Alphabet have publicly confirmed the details of the potential deal.
Wiz's appeal lies in its cloud-based security solutions tailored for enterprise customers. Acquiring Wiz could have bolstered Google's competitiveness against industry leaders like Microsoft and Amazon. However, the deal's potential antitrust implications and investor concerns likely played a role in Wiz's decision to walk away. With the US Justice Department already pursuing two antitrust lawsuits against Google regarding its search engine and digital advertising practices, adding a significant cybersecurity acquisition to the mix could have invited further regulatory scrutiny.
Google has shown a recent interest in expanding its cybersecurity capabilities, as evidenced by its 2022 acquisitions of Siemplify and Mandiant for $500 million and $5.4 billion, respectively. Mandiant, in particular, gained prominence for its role in exposing the SolarWinds hack. Despite missing out on Wiz, Google's continued investments in cybersecurity indicate its commitment to strengthening its position in this critical domain.