Google parent Alphabet is in the final stages of negotiations to buy cloud cybersecurity startup Wiz for a record $23 billion, according to the Wall Street Journal. If the deal doesn’t fall through, it could be Alphabet’s largest acquisition in history since it bought Motorola Mobility for $12.5 billion in 2012. We’ll keep you updated as more details emerge.
Wiz’s Rapid Rise
Based in New York and founded in 2020 by CEO Assaf Rappaport and his associates, Wiz has achieved impressive results in a short time. The company raised $1 billion in funding earlier this year at a $12 billion market cap and is one of the few startups outside the AI industry to achieve a significant 2024 valuation. Wiz’s success is especially noteworthy amid a general downturn in the startup market, which is still reeling from the tech boom of the early part of the decade. The company reported $100 million in annual recurring revenue after just 18 months of operations, with that figure rising to $350 million in 2023.
Impact and Context of the Acquisition
Google’s (Alphabet) interest in Wiz comes amid increased antitrust scrutiny of the search giant and other tech companies. Google has already faced lawsuits from the US Department of Justice on charges of violating antitrust laws in the field of internet search and advertising technologies. The acquisition could also help bolster Alphabet’s position in cloud computing, an increasingly important and fast-growing business area in which the company currently trails its competitors. Despite the rapid growth of this business area (Google grew 26% last year), the company still lags significantly behind market leaders and ranks third behind Amazon and Microsoft, notes NIXsolutions.
If the deal is successful, it will be one of the largest in the technology sector in recent memory, especially given the general slowdown in mergers and acquisitions (M&A) due to antitrust risks and high interest rates. Earlier this year, American multinational Cisco completed its $28 billion takeover of software developer Splunk, which also focuses on troubleshooting IT infrastructure, confirming the growing interest in IT security among large companies. We’ll keep you updated as this story develops.