Published on: July 23, 2024
Cybersecurity startup Wiz Inc. has rejected a takeover bid of up to $23 billion from Alphabet Inc.’s Google.
The company has decided to proceed with its plan for an initial public offering instead. A source familiar with the matter said Wiz’s investors fully supported the decision.
“While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” CEO Assaf Rappaport wrote in the note. He said the company’s next milestones are reaching $1 billion in annual recurring revenue.
“Let me cut to the chase: our next milestones are $1 billion in ARR and an IPO,” Rappaport said in an email to employees about Google’s offer. “The market validation we have experienced following this news only reinforces our goal — creating a platform that both security and development teams love.”
The proposed deal, worth nearly $23 billion, would have been almost double the size of Google’s largest acquisition to date: the $12.5 billion purchase of Motorola Mobility in 2012.
Meanwhile, Wiz, a New York-based cloud security firm that helps companies identify and address risks within their cloud infrastructure, claims to be the world’s fastest-growing startup. Earlier this year, the company announced that it achieved $350 million in annual recurring revenue last year and now provides services to over 40% of Fortune 100 companies.
Alphabet’s offer valued Wiz at nearly twice its valuation from its last fundraising round. In May, investors like Andreessen Horowitz, Lightspeed Venture Partners, and Thrive Capital estimated the 4-year-old company to be worth $12 billion.
For a tech giant like Alphabet, acquiring a company as substantial as Wiz would be unusual. This is because Google is already dealing with several regulatory challenges, including a lawsuit by the US Justice Department accusing it of abusing its dominant position in search, and another lawsuit concerning its digital advertising tools.