Wiz walks away from Alphabet offer of 23 billion dollar takeover

Google’s parent company Alphabet’s proposed acquisition of Wiz is off the table. The security company’s top brass has decided not to take their suitor up on a 23 billion dollar offer and is instead opting for an IPO.

In a memo to staff, Assaf Rappaport, CEO of Wiz, wrote that the previously stated ambition of achieving 1 billion dollars in revenue remains intact even in this new plan, according to The New York Times. When that is achieved, Wiz will go public, is the plan.

“While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” Rappaport wrote. “Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice.”

Biggest acquisition ever

Alphabet has not yet responded to the news. Had the acquisition gone through, it would have been the company’s largest-ever acquisition. Earlier, a proposed acquisition of CRM vendor Hubspot was also scrapped. That might have been an even bigger acquisition.

Wiz offers technology for real-time cyber threat detection and response. By deploying artificial intelligence, Wiz has been able to attract many companies as customers in a short period of time. Had the acquisition attempt gone through, Alphabet might’ve faced the US government’s aversion to such mega-deals. Regulatory authorities are tough on big tech companies getting ever bigger through acquisitions.

Not the first startup

Wiz was founded in 2020 by four former Israeli military officers who were veterans of setting up security companies. Microsoft bought their previous startup, Adallom, for 320 million dollars. By 2023, Wiz posted revenues of 350 million dollars. At that time, 40 percent of the world’s largest companies were already customers. It also recently raised 1 billion during an investment round, after which Wiz reached a valuation of 12 billion dollars.

Recently, Wiz itself has made several attempts to accelerate growth through acquisitions. In April, for example, it acquired Gem Security to expand its cloud detection & response capabilities. There was also an ambition to buy Lacework, once worth billions, but that fell through because the parties could not agree on the details.

Also read: US antitrust watchdog wants more details on IBM’s acquisition of HashiCorp