Here’s What Happened
Wiz, the Israeli cybersecurity startup, has decided to pull the plug on a potential $23 billion acquisition by Alphabet Inc., Google‘s parent company. This deal would have been Google’s biggest ever, but Wiz has chosen a different path.
Sticking to the Original Plan
Assaf Rappaport, CEO of Wiz, explained that the company is now focusing on its original plan to go public. Their goal? To hit $1 billion in annual recurring revenue. “Turning down such a huge offer is tough, but with our amazing team, I feel confident in this decision,” Rappaport said in a memo to employees.
No Official Word
Neither Wiz nor Alphabet has officially confirmed the talks. The internal memo from Wiz didn’t specifically mention Google or Alphabet. Google hasn’t responded to requests for comments, and Wiz has declined to provide additional details.
The Backstory
Earlier this month, Alphabet was in advanced talks to acquire Wiz for around $23 billion. This valuation was nearly double Wiz’s previous valuation in May when it raised $1 billion in a private funding round, reaching a valuation of $12 billion.
What Wiz Does
Wiz specializes in cloud-based cybersecurity solutions that use artificial intelligence to help companies identify and mitigate critical risks on cloud platforms. Halting the acquisition talks is a setback for Google, which has been investing heavily in its cloud infrastructure. Google’s cloud business generated over $33 billion in revenue last year, and acquiring Wiz would have been a significant boost.
The Cyber Outage Factor
A global cyber outage last week, caused by a faulty update from cybersecurity firm CrowdStrike, played a big role in the breakdown of the deal talks. This outage highlighted the importance of cloud cybersecurity firms like Wiz and increased interest in such companies.
Alphabet’s Recent Struggles
This development marks the second recent setback for Alphabet in the merger and acquisition space. They recently abandoned plans to acquire online marketing software company HubSpot.
Previous Acquisitions
Had the deal gone through, Wiz would have been Alphabet’s second major acquisition in the cybersecurity sector, following its $5.4 billion purchase of Mandiant in 2022.
The Bottom Line
Wiz’s decision to cancel the potential $23 billion acquisition by Google shows its confidence in its growth strategy and commitment to going public. While this move is a setback for Google’s cloud ambitions, it underscores the increasing value and importance of cybersecurity in today’s digital age.
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