Alphabet, the parent company of Google, is once again in advanced negotiations to purchase the cloud cybersecurity startup Wiz, according to an individual familiar with the discussions who spoke to TechCrunch. Previously, the companies nearly concluded a deal at a $23 billion valuation last summer, but the transaction did not progress further.
This time, the negotiation involves a higher price, with reports from The Wall Street Journal indicating a valuation of approximately $30 billion. The effort is being spearheaded by Thomas Kurian, head of Google’s cloud division.
Google Cloud considers Wiz’s cloud security products to align well with its customer needs, with Wiz’s annual recurring revenue (ARR) being particularly attractive. As of last July, Wiz’s ARR was $500 million, with projections to reach $1 billion by 2025, according to TechCrunch.
A $30 billion price tag would represent a significant premium, considering that Wiz secured $1 billion in its last funding round at a $12 billion valuation last May. The valuation increased to $16 billion in a subsequent employee tender offer later that year.
Though Wiz announced no intentions to go public in 2025, it appointed Fazal Merchant, formerly an executive at DreamWorks and Tanium, as Chief Financial Officer. Such appointments sometimes suggest preparation for a public offering.
Previous negotiations faltered partly due to disagreements on whether Wiz would remain a separate entity or integrate with Google Cloud, as reported by The Wall Street Journal. Additionally, high regulatory scrutiny under the Biden administration influenced the breakdown of the deal last summer.
An increase in mergers and acquisition activity has been noted by other investors, with many anticipating that FTC Chair Andrew Ferguson might allow more large transactions than his predecessor Lina Khan, according to another person familiar with various negotiations.
Founded in 2020, the New York and Israel-based Wiz was established by four former Israeli military officers who previously co-founded Adallom, a cloud cybersecurity company acquired by Microsoft for $320 million.
Wiz’s investors include Andreessen Horowitz, Cyberstarts, Index Ventures, Greenoaks, Insight Partners, and Sequoia. A spokesperson for Wiz declined to comment on the ongoing discussions regarding the deal.
