![Wiz CEO Assaf Rappaport. Wiz CEO Assaf Rappaport.](https://pic1.calcalist.co.il/picserver3/crop_images/2021/10/11/1129843/1129843_0_0_1889_959_0_large.jpg)
The $23 billion gamble: Wiz's bold move to stay independent
The $23 billion gamble: Wiz's bold move to stay independent
CEO Assaf Rappaport and the other founders did not want to sell Wiz to Google. Reluctantly, they had to participate in the negotiations and show full commitment to the company's investors. However, as the moment of truth approached, they made an unexpected decision: to give up $23 billion in favor of the more challenging option of developing the company in preparation for a giant IPO.
Assaf Rappaport did not want to sell Wiz to Google. He truly believes that Wiz can become a huge company. Selling it for a significant amount is indeed an honor for the State of Israel and would result in substantial profits for everyone involved, but the founders of Wiz do not need the money. They have already had a significant exit and do not need these additional amounts. The four founders of Wiz believed on the eve of the deal, and still believe today, that they have a company in their hands that will soon become a huge entity and a direct competitor to all the cyber giants.
A few months ago, Wiz raised a billion dollars from investors led by Andreessen Horowitz, Lightspeed, and others, valuing the company at $12 billion. The opportunity presented by Google was an offer that was hard to refuse—a quick exit that doubles the return in a very short time without any need to invest time and resources in its development in preparation for the offering. The leak of the deal being negotiated benefited those funds, placing a high price tag on the company, blocking competition, and creating a serious problem for Wiz if the deal fell through and its image was damaged.
The problem was that both Google and its investors knew that without Wiz's entrepreneurs, the company had no future. The four founders—CEO Assaf Rappaport, CTO Ami Luttwak, VP Product Yinon Costica, and VP R&D Roy Reznik—did not eagerly pursue the deal. They understood that they had to show full commitment to the company's investors. However, as the moment of truth approached, they realized they had to choose between accepting the $23 billion offer or pursuing the challenging path of developing the company, aiming for a billion dollars in revenue and a significant IPO in the U.S. They chose the harder option, determined to prove that Wiz deserves more than just an impressive exit.
The biggest loser, or perhaps the biggest gainer, from the deal is the State of Israel. Government officials had anticipated revenue from the deal and relied on it to support the state's budget for the coming year. However, the Wiz founders, who are not fans of the current government, focused on the future. If Wiz becomes a huge company, the ecosystem created around it will generate significant tax revenues, an IPO, and extensive business development that will more than make up for the canceled exit.