Alphabet in Advanced Talks to Acquire Cloud Cybersecurity Startup Wiz at $30 Billion Valuation
Google’s parent company Alphabet is once again in advanced discussions to acquire cloud cybersecurity startup Wiz, according to a source familiar with the deal. Last summer, the two companies were close to finalizing a deal at a $23 billion valuation, but the transaction fell through. This time around, the price being negotiated is higher, with reports suggesting a valuation of around $30 billion.
Thomas Kurian, head of Google’s cloud division, is spearheading the acquisition efforts. Google Cloud views Wiz’s cloud security products as a strategic fit for its customer base, given Wiz’s impressive annual recurring revenue (ARR) of $500 million as of last July, with plans to reach $1 billion in ARR by 2025.
Despite Wiz’s significant growth, a $30 billion price tag would represent a substantial premium. Wiz last raised $1 billion in funding at a $12 billion valuation in May, which subsequently increased to $16 billion in a later employee tender offer. While Wiz stated it had no immediate plans for an IPO, the hiring of a seasoned CFO could indicate preparations for a potential public offering.
One sticking point in previous negotiations was the issue of whether Wiz would operate as a separate entity or be integrated into Google Cloud. Regulatory scrutiny under the Biden administration also played a role in derailing the deal last year.
Industry insiders have noted a resurgence in M&A activity, with hopes that the current FTC leadership will be more amenable to large transactions. Wiz, headquartered in New York and Israel, was founded in 2020 by former Israeli military officers who previously launched Adallom, a cloud cybersecurity firm acquired by Microsoft for $320 million.
Wiz’s investors include Andreessen Horowitz, Cyberstarts, Index Ventures, Greenoaks, Insight Partners, and Sequoia. A spokesperson for Wiz declined to comment on the ongoing acquisition discussions.
