Thought Leadership
Insiders report that Google’s parent company Alphabet is once again in advanced talks to acquire the cloud cybersecurity start-up Wiz. This time at a higher price.
After similar negotiations broke down last summer at a valuation of 23 billion US dollars, a significantly higher sum is apparently being discussed this time. The Wall Street Journal is talking about a valuation of around 30 billion US dollars. Like the near takeover last year, it would therefore be the largest acquisition in Google’s history.
A strategic extension for Google Cloud
Thomas Kurian, head of Google’s cloud division, is once again leading the negotiations, according to TechCrunch . Google Cloud sees Wiz’s cloud security products as a valuable addition to its own customer base. Wiz’s annual recurring revenue (ARR), which amounted to USD 500 million in July last year, appears particularly attractive – with the declared goal of reaching the USD 1 billion mark by 2025.
Nevertheless, a purchase price of 30 billion US dollars would be a considerable sum: in its last external financing round in May last year, Wiz was valued at 12 billion US dollars. An employee share offer at the end of 2023 is expected to increase the valuation to USD 16 billion.
The earlier failure of the takeover talks is said to be due, among other things, to differences of opinion as to whether Wiz should continue to exist as an independent division or be integrated into Google Cloud. In addition, the strict regulatory scrutiny of large takeovers under the Biden administration played a role in the breakdown of negotiations last summer.
What does Wiz do?
Wiz was founded in 2020 by four former Israeli military officers who had previously established the cloud cybersecurity company Adallom, which was later acquired by Microsoft for USD 320 million. Wiz’s investors include well-known venture capital firms such as Andreessen Horowitz, Cyberstarts, Index Ventures, Greenoaks, Insight Partners and Sequoia.
The company specializes in cloud-based security solutions and offers a platform that uses artificial intelligence and machine learning to identify and fix security vulnerabilities in cloud infrastructures before they can be exploited. It analyzes the computing infrastructure hosted in large cloud platforms such as Amazon Web Services, Microsoft Azure, Google Cloud Platform, Oracle Cloud Infrastructure and Kubernetes. The system looks for combinations of risk factors that could allow malicious actors to gain control of cloud resources or exfiltrate valuable data
The platform creates a normalization layer between different cloud environments, enabling companies to quickly identify and remediate critical risks. This helps security teams gain the insights they need to minimize risk and drive innovation across the enterprise. Wiz has quickly become a leading provider in this area and counts 40 percent of Fortune 100 companies among its customers.
