Wiz reportedly ends talks to acquire Google for $23 billion

Wiz Inc. has ended talks with Google LLC over a takeover that could value the cybersecurity startup at $23 billion, sources reported.

This “Wall Street Journal” AND CNBC announced the development today, citing an internal Wiz memo. CEO Assaf Rappaport (pictured, second from left) wrote in the memo that “it is difficult to say no to such a humiliating offer, but with our exceptional team, I feel confident in making this choice.”

Wiz will reportedly now focus on preparing the ground for an initial public offering. In May, Rappaport he said The cybersecurity firm hopes to reach $1 billion in annual recurring revenue before its shares list, the Journal reported. Wiz’s annual recurring revenue is already reportedly above $500 million, up from $350 million last year and $100 million in August 2022.

The company’s rapid sales growth is likely one reason for the high price it was expected to fetch from Google. The $23 billion the search giant reportedly could pay is almost double the valuation Wiz received after its last funding round, a $1 billion raise it announced in May. Including that investment, the cybersecurity provider has raised a total of $1.9 billion from investors to date.

A source told CNBC that “antitrust and investor concerns” played a role in the decision not to sell Wiz. Google is currently lining antitrust lawsuit in the US, and also European Union investigation in terms of compliance with the bloc’s tech industry regulations. Visa executives may have feared that the acquisition would have difficulty getting approval from antitrust officials.

Since its launch in 2020, Wiz has built a broad cloud security platform that combines several breach prevention tools into one product. The software scans cloud environments for vulnerabilities as storage containers that can be accessed over an open network. It also detects hackers’ attempts to exploit those vulnerabilities and provides features for several related tasks, such as ensuring a company’s compliance with the EU’s GDPR data privacy regulation.

Wiz can find security issues not only in cloud instances, but also in other off-premises technology resources. The platform detects security issues in serverless functions, pieces of code that run without much of the software scaffolding needed by traditional applications, and in container registries. A container registry is a type of internal app store that a company’s developers use to share frequently used software components.

Wiz provides automated workflows that promise to reduce the time it takes to address breaches. The company says these workflows speed up tasks like collecting technical data about a cyberattack. The result is a reduction in the time it takes to remove malware from cloud environments.

To secure cloud-based AI models, Wiz provides a set of capabilities known as AI-SPM. It can detect cases where employees have unnecessarily broad access to the source code of an AI model. AI-SPM also detects other issues, such as incorrectly configured security settings, that could make an instance with AI training data vulnerable to hacking.

Wiz says its platform is used by more than 40% of Fortune 500 companies. According to the company, these customers run 230 billion cybersecurity scans every day across 5 million cloud workloads.

The acquisition of Wiz would not be Google’s first major cybersecurity acquisition. In 2022, the search giant bought cybersecurity services provider Mandiant for $5.4 billion. Mandiant, which now operates as a unit of Google Cloud, helps companies detect and remediate breaches.

Photo: Wiz