Sundar Pichai, CEO of Alphabet Inc., during Stanford’s 2024 Business, Government, and Society forum in Stanford, California, April 3, 2024.
Justin Sullivan | Getty Images
Wiz has walked away from a $23 billion deal to be acquired by Google, in what would have been the search giant’s largest ever deal, telling employees it would pursue an initial public offering as it initially planned.
“Saying no to such humbling offers is tough,” Wiz co-founder Assaf Rappaport said in a memo obtained by CNBC to the company’s worldwide employee base.
Rappaport wrote that the company would focus on its next milestones: an initial public offering and $1 billion in annual recurring revenue, both targets which the company had been eyeing well before talks had been reported.
Google did not immediately respond to requests for comment.
The deal would have nearly doubled the $12 billion valuation of the startup from its most recent round of funding. Wiz was founded in 2020 and has grown at a rapid speed under Rappaport, who had been eyeing an IPO as recently as May. A person familiar with the company’s thinking cited both antitrust and investor concerns as part of the motivation behind the decision to walk away.
Exits in technology have been rare this year, between startups waiting for more receptive markets before going public and cash-rich companies fearing they wouldn’t win regulatory clearance for transactions.
Wiz’s cloud security products include prevention, active detection and response — a range that has appealed to large firms and would have helped Google compete with Microsoft which also sells security software.
The company hit $100 million in annual recurring revenue after 18 months, and achieved $350 million in annual recurring revenue in 2023. It’s backed by a roster of blue-chip firms, including Israeli venture capitalist Cyberstarts, Index Ventures, Insight Partners and Sequoia Capital.
Google successfully acquired cybersecurity firm Mandiant for $5.4 billion in 2022. Google’s largest deal remains the acquisition of hardware maker Motorola in 2012 for $12.5 billion, which it ended up selling to Lenovo for $2.9 billion in 2014. As recently as last week, Google reportedly ended conversations to acquire sales software maker HubSpot.
In an interview with CNBC’s Sara Eisen and Carl Quintanilla at the New York Stock Exchange last year, Eisen asked Rappaport if he wants to take the startup public.
“Yeah, definitely,” he said. He laughed. “That’s why we’re here.”
This is breaking news. Please check back for updates.