According to a report in the Wall Street Journal, Google’s parent company, Alphabet, is in advanced talks to acquire the cybersecurity startup Wiz in a deal valued at approximately $23 billion. If completed, this would be Google’s largest acquisition ever. In such a case, the deal could yield about $10 billion for its founders.
Wiz, founded in 2020 by CEO Assaf Rappaport and three other partners – Ami Luttwak (CTO), Yinon Costica (VP R&D), and Roy Reznik (CPO) – provides cybersecurity software for cloud computing services.
The company raised $1 billion earlier this year at a valuation of $12 billion, making it one of the few startups outside the artificial intelligence industry to raise money at a higher valuation in 2024. The valuation in the emerging deal with Google is almost double its previous valuation this year.
Wiz’s meteoric success led to its four founders recently entering Forbes’ global wealth list, each with a value of over $1 billion. Their accumulated wealth stems from their holdings (about 10% each) in the company they founded together just four years ago. Following the massive fundraising in May, the net worth of each founder jumped to $1.2 billion. If the Google deal goes through, the combined value of the four founders could reach about $10 billion.
The four founders established another company almost a decade ago, the security startup Adallom, which was later sold to Microsoft for $320 million. According to estimates, each of the founders received $25 million in the sale transaction.
The planned acquisition is taking place during a period of increased antitrust scrutiny of Google and other tech giants. However, it could strengthen Alphabet’s efforts in cloud computing, an important and growing field where it lags behind its competitors. Google is currently third in this market, behind Amazon and Microsoft.
If completed, the deal would mark a rare exit for prominent investors such as Sequoia Capital, Andreessen Horowitz, and others, at a time when the IPO market is stagnating and the antitrust environment is deterring startups from seeking merger and acquisition opportunities.
The planned deal is one of the largest technology transactions in recent times, as antitrust scrutiny and high interest rates deter potential buyers. Nevertheless, the cybersecurity sector remains a focus for deals, as evidenced by Cisco’s acquisition of Splunk for $28 billion earlier this year.
