Google reportedly considering largest acquisition with Wiz for $23 billion

Google is reportedly in advanced negotiations to acquire cybersecurity startup Wiz for $23 billion, marking the tech giant’s largest acquisition to date. The Wall Street Journal reported Sunday, July 14, citing sources familiar with the matter, that the deal could close soon.

How will this acquisition impact Google Cloud?

Google parent Alphabet sees the potential acquisition as a significant step to strengthen its cloud business. Google Cloud grew 28% to $9.57 billion in revenue in the first quarter of this year. Wiz offers a comprehensive cloud security solution, integrating data from Amazon Web Services, Microsoft Azure, Google Cloud and other platforms to scan for security threats.

Founded in 2020 by former Microsoft employees Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik, Wiz has quickly risen to prominence in the cybersecurity industry. The company recently raised $1 billion in a Series E funding round, raising its valuation to $12 billion. Wiz now has $1.9 billion in total funding and $350 million in annual recurring revenue.

Investors supporting the company include: Andreessen Horowitz, Lightspeed Venture Partners, Thrive, Greylock, Wellington Management, Cyberstarts, Greenoaks, Howard Schultz, Index Ventures, Salesforce Ventures and Sequoia Capital.

Wiz’s cloud security services provide comprehensive visibility into a company’s cloud infrastructure, an attractive feature for large organizations with extensive computing resources. The startup is backed by prominent investors including Israeli venture capital firm Cyberstarts, Index Ventures, Insight Partners, and Sequoia Capital.

If the acquisition goes through, it would underscore Google’s significant investment in cybersecurity, especially as cyber threats from nation states and criminal organizations continue to rise. Google’s previous significant investment in cybersecurity includes its $5.4 billion acquisition of Mandiant two years ago.

Google’s Antitrust Concerns

However, Google is currently facing increased antitrust scrutiny, with the Justice Department filing two antitrust lawsuits against the company. The most recent lawsuit, filed in 2023, specifically targeted Google’s acquisition practices.

Despite these challenges, the talks with Wiz indicate that Google still wants to pursue M&A. This comes after reports of Google’s interest in acquiring sales software maker Hubspot, a pursuit that has reportedly cooled.

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