Google Parent Alphabet in Talks to Acquire Wiz for $23 Billion

Google Parent Alphabet in Talks to Acquire Wiz for $23 Billion
Image credit: CNBC

Alphabet, the parent company of Google, is in advanced discussions to acquire cybersecurity startup Wiz for $23 billion, according to a source who spoke to TechCrunch. The Wall Street Journal initially reported on the negotiations.

Founded in 2020, Wiz has seen rapid growth, reaching an annual recurring revenue (ARR) of $100 million just 18 months after its launch. By May, the ARR had grown to $350 million, and it currently stands at $500 million, with plans to hit $1 billion next year. Despite its intentions to eventually go public, Wiz was not actively seeking a buyer until approached by Google.

The negotiations began a few weeks ago when Thomas Kurian, head of Google’s cloud division, reached out to Wiz. Talks have progressed quickly, and both parties have tentatively agreed on the purchase price. However, the source indicated that such a large deal comes with many hurdles that need to be addressed, with negotiations potentially taking another week to 10 days and a 50% chance of falling through.

Wiz team
Image credit: Wiz

If finalized at $23 billion, the acquisition would more than double Wiz’s last private valuation of $12 billion, achieved during its $1 billion Series E funding round in May. This valuation would also place Wiz at 46 times its current ARR and 23 times its projected 2025 ARR, compared to its competitor Palo Alto Networks, which trades at just above 14 times its trailing 12-month revenue.

Google Cloud sees potential revenue synergies with Wiz, which could enhance the tech giant’s ability to sell the cybersecurity firm's products to its customers. Wiz’s rapid growth and strong market position make it an attractive acquisition target.

Wiz’s investors include Andreessen Horowitz, Cyberstarts, Index Ventures, Insight Partners, and Sequoia. The deal, if successful, would mark a significant milestone in the cybersecurity sector and underscore Google's commitment to strengthening its cloud services.