A huge merger in Israeli cyber? Wiz considers potential bid for SentinelOne
A huge merger in Israeli cyber? Wiz considers potential bid for SentinelOne
If the deal goes through Wiz will need to raise capital for this move, as it will be worth more than $5 billion. Bloomberg reports that Wiz is already in talks with banks that may finance the bold move
Israeli cloud cyber startup Wiz, which was valued at $10 billion in its latest funding round, is weighing a bid for Israeli cyber company SentinelOne, which currently trades at around $4.9 billion, according to a Bloomberg report. Wiz spokeswoman Tamar Harel said today that the company is considering the potential purchase of SentinelOne. According to her, Wiz has been following "SentinelOne's growth journal for several years."
This is an unusual move, as startups typically do not acquire publicly traded companies. However, the report suggests that Wiz is interested in SentinelOne's strong customer base and proven track record in the cloud security market. After the report was released, SentinelOne's shares rose 3.2% in trading on Wall Street. If the deal goes through, Wiz will need to raise capital for this move, as it will be worth more than $5 billion. Bloomberg reports that Wiz is already in talks with banks that may finance the bold move.
The two companies are already cooperating today. In March, they announced a strategic agreement that will combine their cybersecurity solutions, which complement each other almost seamlessly, and enable the protection of corporate activity in the cloud.
One of the significant challenges for Wiz will be raising the funding for the deal, as it will have to compete with the deep pockets of private investment funds such as Thoma Bravo, which may be interested in SentinelOne. Another interested party that may submit an offer for SentinelOne is its main competitor CrowdStrike, which is traded on Wall Street at a value of $35 billion.
Wiz was founded in March 2020 by Rappaport, CTO Ami Luttwak, VP Product Yinon Costica, and VP R&D Roy Reznik. Rappaport was previously General Manager of R&D at Microsoft Israel after having sold his previous company Adallom to the tech giant for $320 million in 2015.
SentinelOne, which was launched in Israel in 2013, protects laptops and mobile phones from security breaches by using artificial intelligence to identify unusual behavior in enterprise networks. It competes with CrowdStrike, and its customers include major companies and the U.S. government.
Backed by Daniel Loeb's hedge fund Third Point and venture capital firms including Tiger Global and Sequoia Capital, SentinelOne listed in the U.S. stock market in 2021 at a $8.9 billion valuation. However, investor excitement soon turned to disappointment as the company struggled to become profitable as it kept its prices low with clients to win market share. In June, SentinelOne also disclosed that it had overvalued its annual recurring revenue and had to restate it due to "a change in methodology and the correction of historical inaccuracies."
