Google Near $23 Billion Deal for Cybersecurity Startup Wiz

Alphabet, Google's parent company, is reportedly in advanced negotiations to acquire cloud security startup Wiz for approximately $23 billion, Wall Street Journal reported on Sunday. The potential deal, which would value Wiz at nearly double its most recent private valuation of $12 billion, underscores the growing importance of cybersecurity in Alphabet's enterprise strategy as it seeks to narrow the gap with cloud computing rivals such as Microsoft, Morgan Stanley said in a note.

Founded in January 2020, Wiz has quickly established itself as a leading player in the Cloud-Native Application Protection Platform (CNAPP) space, utilizing an agentless approach to secure cloud application deployments throughout their lifecycle. The company's platform continuously assesses and prioritizes critical risks across various security domains, providing customers with a comprehensive view of their cloud security posture. Wiz has experienced rapid growth since its inception, with annual recurring revenue (ARR) exceeding $350 million as of January 2024, representing a year-over-year increase of over 75%. The company boasts an impressive client roster, with more than 40% of Fortune 100 companies among its customers, and has raised nearly $2 billion in funding to date.

If confirmed, the acquisition would mark Alphabet's largest to date, significantly expanding its footprint in the burgeoning cloud security market. The move follows previous security-focused acquisitions by the tech giant, including the $5.4 billion purchase of Mandiant in 2022 and the $500 million acquisition of Siemplify. Morgan Stanley adds that the potential acquisition could raise questions about Wiz's ability to maintain neutrality across multiple cloud platforms, potentially benefiting competitors such as Palo Alto Networks and CrowdStrike in the near term.

In other words

[Rosco P. Coltrane]

Wiz' business model was successful: get bought out by one of the big data monopolies for beaucoup bucks.

Because really, in this day and age, that's what all startups and their VCs go for.

Re:

[Pseudonymous Powers]

The really funny part is, even though Wiz was very unlikely to threaten Google's business in any detectable way in the next hundred years, Google bought them out anyway, and will now simply discontinue their product and lay off the staff.

Re:

[LazarusQLong]

100% this! An ex of mine worked for a small telecoms software/hardware startup... they got bought out by Lucent (back in about 2000) for about $2 billion, then lucent laid everyone off and shuttered the business. The original founders then started it back up again, because they had kept rights to stuff. Didn't hire the smae employees back again though, went with people fresh out of college.

Re:

[jacks smirking reven]

Oh, I didn't get rich by writing a lot of checks [youtube.com]

Re:

[dfghjk]

Just now figuring this out? It is literally "exit strategy #1" and has been since before any of us were born.

Re:

[Rosco P. Coltrane]

Speak for yourself. I've been on this dirtball long enough to have known startups genuinely trying to innovate and make a difference. Hell, I work for one.

Re:

[xanthos]

Agreed. The old strategy was "go public" and cash in on your stock options. PE/Hedge funds are the new investment bankers of old. They have the advantage of bypassing huge chunks of regulatory scrutiny as they hoover up anything that has short term profit potential. Long term profit takes a vision, hard work, and the guts to stick it out during the bad times. Short term profit only requires pink slips.

Re:

[Mr0bvious]

Seems to have not aged well.. Wiz declined the $23b offer.

Gee!

[jenningsthecat]

Does that mean Google is planning to take a Wiz on cybercrime?

Sorry, I couldn't resist... ;-}

Umm... What Am I Missing Here?

[ewhac]

Google has employees, offices, and server farms around the world. These resources are secured using tools and infrastructure Google designed and built itself over the last 25+ years. Google presumably understands how to secure systems and networks, and the applications running on them.

...So why are they suddenly spending $2.3E+10 buying a company that does what they already know how to do?

Re:

[Himmy32]

Because it's not for them, it's to sell to the customers using their cloud.

Thank goodness we didn't buy this

[ShoeBabyBurntToast]

I really feel like I dodged a bullet here. I was intrigued by their product and sat through a sales presentation with a couple of folks from my team. The product itself required some privileges that we weren't comfortable giving to unknown third parties know and we didn't go further with them. If we'd moved forward with them then I'd now be forced to trust Google with access to things I actually care about.

I shudder at the thought.

Re:

[phantomfive]

What do they do that is worth paying for? From what I can see, they have a really pretty dashboard, and from time to time will tell you to update your software.

Re: Thank goodness we didn't buy this

[ShoeBabyBurntToast]

They had a few interesting audit capabilities and their console for visualizing permissions looked pretty neat.

Part of the appeal was that we could provide their reports and assessments to security teams at our clients and allow them to check boxes in their ever changing internal audits without too much effort on our side.

Good one!

[Anamon]

"[...] as it seeks to narrow the gap with cloud computing rivals such as Microsoft [...]"

We all know that there's only one direction to move in for anyone wanting to close that gap XD