Google’s parent, Alphabet, is in advanced talks to acquire cybersecurity startup Wiz for approximately $23 billion, sources said.
If finalized, this would represent Alphabet’s largest acquisition to date.
The acquisition could greatly enhance Alphabet’s cloud computing division, a sector where it has lagged behind competitors.
Founded in 2020 by CEO Assaf Rappaport and his team, Wiz has quickly risen in valuation.
Earlier this year, the company raised $1 billion at a valuation of $12 billion.
Unlike many startups still feeling the effects of the tech boom’s decline, Wiz has thrived.
The company boasts $100 million in annual recurring revenue after just 18 months and reaching $350 million in 2023.
The startup is backed by prominent venture capital firms such as Sequoia Capital, Andreessen Horowitz, Index Ventures, and Lightspeed Venture Partners.
A successful Google acquisition would provide a rare and lucrative exit for these investors.
It’s especially during a period when the IPO market is sluggish and antitrust concerns are making startups wary of mergers and acquisitions.
The Wiz deal would beat Google’s previous largest acquisition of Motorola Mobility for $12.5 billion in 2012Â
Wiz’s founders previously sold their first startup, Adallom, to Microsoft for $320 million in 2015 before launching Wiz.
Wiz operates from New York and has additional offices in the U.S. and Israel.
It partners with major cloud companies, including Amazon, Microsoft, and Google.
Despite its massive market value of over $2 trillion, Google has been relatively conservative in acquisitions compared to peers like Microsoft.
Microsoft spent $26 billion on LinkedIn and $75 billion on Activision Blizzard.
If completed, the Wiz deal would surpass Google’s previous largest acquisition of Motorola Mobility for $12.5 billion in 2012.
Other significant acquisitions include Fitbit for $2.1 billion in 2021, Nest Labs for $3.2 billion in 2014, and Mandiant for nearly $5.4 billion two years ago to bolster its cybersecurity efforts.
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Google is under scrutiny in a Justice Department antitrust lawsuit concerning its internet search dominance and another pending suit over its ad-tech practices.
While Google remains dominant in search and online advertising, it is a distant third behind Amazon and Microsoft in cloud computing.
However, Google is heavily investing in this area.
Its cloud business grew 26 percent last year and reported its first operating profit.
If the Wiz acquisition proceeds, it will be one of the largest tech deals in recent times, highlighting the growing focus on cybersecurity amidst antitrust challenges and high-interest rates.
Cisco’s recent $28 billion acquisition of Splunk underscores this trend.
