Cybersecurity company Wiz in Israel turned down a $23bn (£17.8bn) takeover deal from Alphabet, the parent company of Google. It would have been Wiz’s biggest acquisition ever.
The BBC saw Wiz founder and CEO Assaf Rappaport’s letter to staff saying he was “flattered” by the offer. He said that the business would wait until it made $1bn (£775m) in sales before putting shares on the market.
According to a person familiar with the matter, the offer was “very tempting.” However, Wiz thought it was big enough to go it alone and try to become the world’s largest cyber-security business.
The company said earlier this year that it made $500 million (£387 million) a year in recurring income.
It also said it was the fastest-growing software company ever in 2022 when it made $100 million (£74 million) in its first 18 months.
Wiz and Alphabet were consulted.
In a note to staff, Mr. Rappaport said, “I know the last week has been busy with all the talk about a possible acquisition.”
“Even though the offers we’ve received have made us feel good, we’ve decided to keep building Wiz.”
Wiz turned down Google’s offer and will now try to make an initial public offering (IPO), which is a big step that would put the company on a stock exchange for the first time.
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Defense to Microsoft
Mr. Rappaport and his three co-founders, Ami Luttwak, Roy Reznik, and Yinon Costic, met while they were all in the Israeli service. Wiz is their third business. They worked together in an organization that was like GCHQ in the UK or the NSA in the US.
People who worked in this section have gone on to start some of the biggest Israeli cyber-security companies in the world, like Check Point, Palo Alto, and Armis. A cybersecurity company called Adallom was started by its owners in 2012. Three years later, Microsoft bought it for $320 million (£248 million). As part of the deal, the founders took their team to work on security goods at the tech giant.
They quit Microsoft and in March 2020, they released Wiz.
Some people think that the founders’ work at Microsoft is what got Alphabet so excited about the idea of buying Wiz.
It was worth $12bn (£9.3bn) in May when a $1bn (£775m) effort was going on. UK Stock Exchange head of tech Neil Shah wrote on LinkedIn, “This is the way of thinking we need in Europe.” Although Wiz’s founders could have made a lot of money, they chose to put their money back on the roulette table in the hopes of a better long-term result. “They saw where the value went last time when they sold,” the source said. Wish them luck. Wiz’s website says that it has bases in New York, Tel Aviv, and three other US cities.
FAQs
Wiz, a cybersecurity startup, turned down a massive $23 billion acquisition offer from Google. The company’s CEO, Assaf Rappaport, stated in an internal memo that Wiz is focused on achieving its own milestones, including going public and reaching $1 billion in annual recurring revenue.
This decision is a significant setback for Google as it seeks to strengthen its cloud computing business.
The acquisition would have been Google’s largest ever and would have boosted its cloud security capabilities to compete with rivals like Amazon and Microsoft
