Wiz turns down Google's $23B acquisition offer, opting for an IPO. Learn the ins and outs of this business before it hits the markets.
Sept. 19, 2024
In a surprising turn of events, Wiz, a rapidly growing cybersecurity company, has decided to pursue an initial public offering (IPO) instead of accepting a $23 billion acquisition offer from Google. This decision has stirred significant interest in the tech and investment communities, given the implications for both companies and the broader cybersecurity market. Here's everything you need to know about Wiz, the company that said no to Google.
Key Takeaways
- Wiz, a top cybersecurity firm, rejected Google's $23B acquisition offer.
- The company will pursue an IPO to maintain growth and independence.
- Wiz's decision highlights its confidence and market strength in cloud security.
The Rise of Wiz
Founded in 2020, Wiz quickly established itself as a formidable player in the cybersecurity space. The company offers an enterprise-facing cloud security platform that provides real-time threat detection and responses powered by artificial intelligence. Wiz's solutions include cloud security posture management, visibility and monitoring, risk assessment, threat detection and response, compliance management, automated remediation, and integration with other security tools. These capabilities help organizations secure their cloud infrastructure, applications, and data, making Wiz an essential partner for many large enterprises.
The founders of Wiz are veterans of the Israel Defense Forces' cyber intelligence unit, known as Unit 8200, which has a reputation for producing top-tier cybersecurity talent. This elite background has contributed to Wiz's innovative approach and rapid success. In just a few years, Wiz's annual recurring revenue (ARR) skyrocketed to $100 million, growing to $350 million by 2023. This impressive growth attracted investments from major venture capital firms like Index Ventures, Sequoia Capital, and Greenoaks.
The Google Acquisition That Wasn't
In an unexpected move, Google initiated advanced talks to acquire Wiz for $23 billion. This acquisition would have been Google's largest ever, significantly surpassing its $5.4 billion purchase of cybersecurity firm Mandiant in 2022. The acquisition was seen as a strategic move for Google to bolster its cybersecurity offerings, especially given the increasing importance of cloud security.
However, the deal was not set in stone. Antitrust scrutiny and regulatory hurdles posed significant challenges, as recent high-profile tech deals have faced intense regulatory pushback. Examples include Microsoft's attempted acquisition of Activision Blizzard, Nvidia's bid for Arm, and Visa's planned purchase of Plaid, all of which were blocked or abandoned due to regulatory concerns.
Despite the potential for regulatory roadblocks, Google's offer was substantial. At $23 billion, the valuation was 46 times Wiz's $500 million in ARR, a multiple that exceeded even that of CrowdStrike, another major player in the cybersecurity market. However, in a bold move, Wiz's founders and leadership team chose to reject the offer and proceed with their original plan to go public.
Why Wiz Said No
The decision to reject Google's acquisition offer was influenced by several factors. According to reports, Wiz's leadership was concerned about antitrust issues and the potential impact on their long-term growth strategy. Assaf Rappaport, Wiz's co-founder, emphasized in a memo to employees the importance of maintaining the company's independence and pursuing its vision through an IPO.
Choosing to go public allows Wiz to continue its aggressive growth strategy, leveraging the capital raised from an IPO to expand its market presence and invest in further innovation. The company has already demonstrated its ability to attract significant investment and land major clients, including Barclays, Mars, Morgan Stanley, and Slack. With 40% of the Fortune 500 as customers, Wiz is well-positioned to capitalize on the growing demand for cloud security solutions.
The Road Ahead
As Wiz prepares for its IPO, the company's trajectory will be closely watched by investors and competitors alike. The decision to remain independent and pursue public funding reflects a confidence in its market position and growth potential. For Google, missing out on Wiz means continuing to seek other opportunities to enhance its cybersecurity portfolio.
In conclusion, Wiz's choice to reject Google's acquisition offer and pursue an IPO marks a significant moment in the tech industry. It highlights the increasing value and importance of cybersecurity firms in the digital age and sets the stage for what promises to be an exciting journey for Wiz and its stakeholders. Investors interested in the cybersecurity market will undoubtedly keep a close eye on Wiz as it navigates this next phase of growth and development.
Should you invest $1,000 in Google right now?
Before you buy stock in Google, consider this:
MyWallSt founder Emmet Savage and his team of analysts have been successfully picking stocks for more than 25 years and their favorites are crowned Stock of the Month.
MyWallSt’s Stock of the Month service has more than quadrupled the return of the S&P since 2018* and will provide you with all the guidance you need to confidently build a market-beating portfolio.
Shopify became Stock of the Month in January of 2017 and has since returned 1323%*.
Join MyWallSt Invest Plus to enjoy Stock of the Month and other great benefits like:
- Ten Foundational Stocks to hold until 2034
- A new stock pitch each week from 60k worldwide
- A ranked library of 60+ international stocks
Check Out Stock of the Month
*As of May 2024
Read More From MyWallSt:
