Wiz CEO: “Cybersecurity is becoming Israel’s equivalent of Wall Street”
Assaf Rappaport says the $32 billion Google deal marks a new era for Israeli tech.
1. In the beginning, there was ICQ. In 1998, it introduced Israelis to the world of exits and exposed them for the first time to the concept of getting rich quickly with a technological product. The startup, founded by three young entrepreneurs with long hair, was sold to AOL for $407 million.
The next stop on Israel’s high-tech journey was Waze, which demonstrated that it was possible to develop a product worth a billion dollars to a tech giant—this time, Google. The deal set a new mental anchor for Israeli entrepreneurs and laid the foundation for the unicorn boom that followed nearly a decade later.
In 2017, Mobileye not only set a record with its $15 billion acquisition by Intel but also did something even more significant than just the financial success—it laid the groundwork for an entirely new industry in Israel: autonomous vehicles. Within a few years, Israel became a global hub for companies developing autonomous vehicle technology. Despite delays in realizing the full vision, Mobileye’s success inspired the founding of dozens of related companies, some of which went public on Wall Street, while Israeli engineers registered hundreds of patents. A 2020 report by the international consulting firm KPMG ranked Israel first in the world in technology and innovation for autonomous vehicles, surpassing even the United States in the number of companies per capita operating in the field.
Cybersecurity in Israel, on the other hand, does not require an additional boost. Today, Israel ranks second globally—behind only the United States—in cybersecurity investments and the number of startups. Many of the leading public cybersecurity companies have Israeli roots, including Palo Alto Networks, Check Point, Veronis, and CyberArk. Still, the latest deal will serve as a springboard for hundreds of emerging Israeli cybersecurity companies, reinforcing the validation that the industry provides.
The Wiz acquisition represents the next pivotal milestone in this journey and could have wide-reaching implications. Wiz elevates the aspirations of Israeli entrepreneurs to a new level. Wiz CEO Assaf Rappaport, a rising star of Israel’s cybersecurity industry, who already had one successful exit, provided insight into what cybersecurity could become in Israel:
“In the United States, the best university graduates go to work in the financial sector, which is a symbol of the country. Cybersecurity is becoming Israel’s equivalent of Wall Street.”
While startup founders are known for their imagination and ambition, many need role models, benchmarks, and thresholds to surpass. The sale of this five-year-old cybersecurity company to Google for $32 billion in cash, plus an additional $1.5 billion in employee retention bonuses, is precisely such an event. It sets a new standard for what Israeli entrepreneurs can achieve.
But this historic moment is not just significant for the sellers—it also marks a shift in perception among buyers. The largest shareholders in Wiz include top Silicon Valley venture capital firms, from Sequoia to Andreessen Horowitz, which are now seeing unprecedented returns of 20 times or more on their investment.
Google, of course, did not plan to announce the Wiz acquisition on the very day that Israel returned to war in Gaza. However, the timing—and the fact that Google proceeded with the deal regardless—is telling. It sends a signal to many global investors who have been hesitant since the war began that significant business moves can still happen in Tel Aviv despite political turbulence in Jerusalem. Wiz’s acquisition by Google showcases another facet of Israel in the global media, further elevating the country’s high-tech industry to the highest levels of the game.
2. The $1.5 billion employee retention bonus for Wiz’s 1,800 employees—about half of whom are based in Israel—is no coincidence. It is likely one of the key differences between the $23 billion deal that was discussed in July of last year and the $32 billion deal that was finalized just two days ago.
Employee well-being has always been a priority for Rappaport. Even when the company was a young unicorn entering a crisis period after the post-boom downturn, he continued to push for generous employee benefits, from compensation packages to extravagant trips and events—some of which were criticized as excessive. The most recent company trip occurred just days before Google announced the acquisition.
Now, Wiz employees are set to experience a wave of newfound wealth, reminiscent of 2021, when the founders and employees of ironSource sold $1.5 billion worth of shares upon its Wall Street listing. At the time, there was talk that “all the penthouses in Tel Aviv were gone” because ironSource employees had bought them up. Here, the $1.5 billion retention bonus is being distributed solely among employees—nearly a thousand of whom are in Israel—while the company’s founders and investors receive their billions separately. All in cash.
Google has not specified how long employees must stay to receive their retention bonuses, but the standard period for such deals is typically three to four years. Although Google is acquiring a fully operational and revenue-generating product in Wiz, it is paying an exceptionally high revenue multiple of 32—well above the valuation multiples of major cybersecurity firms like Palo Alto Networks and Check Point, which both trade at less than 20 times revenue.
Google needs Waze employees to remain in order to build out its new cybersecurity division, which failed to gain traction following its $5.4 billion acquisition of Mandiant in 2022. To justify to investors the premium price it is paying, Google needs top talent—including Wiz’s Israeli engineers—to stay for the long haul.
3. Google remained determined despite Wiz’s founders rejecting its previous $23 billion offer. The tech giant pursued the Tel Aviv-based company for more than six months. Moreover, Google’s announcement that the deal will not be completed until 2026 suggests that it is anticipating regulatory hurdles that could take years to resolve.
Despite these risks, Google included an unusual $3.2 billion deal termination fee, signaling its strong commitment to closing the acquisition.
Former U.S. President Donald Trump may be a positive factor in Google’s strategy, but the company will also need to navigate regulatory challenges in Europe. In its announcement, Google sought to highlight two key aspects of the deal that could help ease regulatory concerns.
First, Wiz will become part of Google’s cloud division—a relatively smaller operation within the company—reducing its significance as a target for antitrust scrutiny.
Second, Google is emphasizing a “multicloud” strategy, positioning Wiz as a product that organizations can use across multiple cloud providers. This approach reassures regulators as well as Wiz employees who want to maintain some degree of independence. Wiz currently has significant partnerships with both Amazon Web Services (AWS) and Microsoft Azure, and its technology functions seamlessly across these platforms in addition to Google Cloud. The question is whether Amazon and Microsoft will continue to support a product that strengthens their competitor.
If Google successfully completes this ambitious acquisition, the Wiz deal will not only be its largest acquisition but also the biggest in Israeli history. More importantly, it could mark the beginning of a revival in major mergers and acquisitions, which have been scarce in recent years. Such a revival would likely spill over into the IPO market and reinvigorate investor appetite for technology companies.
