Wiz rejects Google’s $23 billion acquisition offer, eyes IPO instead
Wiz rejects Google’s $23 billion acquisition offer, eyes IPO instead
"Let me cut to the chase: our next milestones are $1 billion in ARR and an IPO. Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice," CEO Assaf Rappaport wrote in an email to employees. The deal was supposed to be the largest acquisition ever by the American search giant and the largest exit of an Israeli company.
Wiz has decided to reject Google's $23 billion acquisition offer—a deal that was supposed to be the largest acquisition ever by the American search giant and the largest exit of an Israeli company.
The amount that Google offered Wiz was almost double the company's last fundraising valuation of $12 billion. However, Wiz CEO Assaf Rappaport has informed its employees that it prefers an initial public offering, its original plan before considering the offer from Google.
“Wizards, I know the last week has been intense, with the buzz about a potential acquisition. While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” Rappaport wrote in an email to the company’s 1,200 employees.
“Let me cut to the chase: our next milestones are $1 billion in ARR and an IPO. Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice.
“The market validation we have experienced following this news only reinforces our goal - creating a platform that both security and development teams love. We are grateful for the faith our employees, investors, and customers have in us as we build the best cybersecurity company in the world.”
The reasons for Wiz's decision to abandon the exit and instead pursue an IPO are still unknown. However, it is possible that the global computer malfunction over the weekend, caused by a failure of CrowdStrike, one of the company's main competitors, influenced their decision. Wiz may see the problem that their competitor encountered as an opportunity to further strengthen their position in the market and then pursue a profitable move of a public offering, which will position them as an independent cyber giant rather than a division of a technology giant. Antitrust scrutiny may have also played a role.
Wiz announced two months ago that it had raised $1 billion at a $12 billion valuation, bringing the company’s total funding to $1.9 billion. The latest round was led by Andreessen Horowitz, Lightspeed Venture Partners, and Thrive Capital, with participation from Greylock, Wellington Management, and existing investors Cyberstarts, Greenoaks, Howard Schultz, Index Ventures, Salesforce Ventures, and Sequoia Capital. The round also included a relatively small secondary component estimated at tens of millions of dollars.
The biggest funding round in Israeli tech history came on the heels of Wiz’s acquisition of Israeli startup Gem Security, a Cloud Detection and Response (CDR) provider. It was Wiz's second acquisition since its inception in 2020, after the company acquired Israeli startup Raftt, a cloud-based developer collaboration platform, last December. Wiz announced earlier this year that it had reached $350 million in ARR, with over 40% of the Fortune 100 as customers. The company previously expressed interest in pursuing M&A opportunities as part of its mission to build a holistic cloud security platform catering to a wide array of industry needs.
Wiz was founded by CEO Assaf Rappaport, CTO Ami Luttwak, VP Product Yinon Costica, and VP R&D Roy Reznik, who according to Forbes now all have a personal fortune of around $1 billion. 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. Wiz’s other co-founders have been with Rappaport since his days in the military and filled various roles at Adallom, too.
