Google Near $23 Billion Deal for Cybersecurity Startup Wiz

Alphabet, Google's parent company, is reportedly in advanced negotiations to acquire cloud security startup Wiz for approximately $23 billion, Wall Street Journal reported on Sunday. The potential deal, which would value Wiz at nearly double its most recent private valuation of $12 billion, underscores the growing importance of cybersecurity in Alphabet's enterprise strategy as it seeks to narrow the gap with cloud computing rivals such as Microsoft, Morgan Stanley said in a note.

Founded in January 2020, Wiz has quickly established itself as a leading player in the Cloud-Native Application Protection Platform (CNAPP) space, utilizing an agentless approach to secure cloud application deployments throughout their lifecycle. The company's platform continuously assesses and prioritizes critical risks across various security domains, providing customers with a comprehensive view of their cloud security posture. Wiz has experienced rapid growth since its inception, with annual recurring revenue (ARR) exceeding $350 million as of January 2024, representing a year-over-year increase of over 75%. The company boasts an impressive client roster, with more than 40% of Fortune 100 companies among its customers, and has raised nearly $2 billion in funding to date.

If confirmed, the acquisition would mark Alphabet's largest to date, significantly expanding its footprint in the burgeoning cloud security market. The move follows previous security-focused acquisitions by the tech giant, including the $5.4 billion purchase of Mandiant in 2022 and the $500 million acquisition of Siemplify. Morgan Stanley adds that the potential acquisition could raise questions about Wiz's ability to maintain neutrality across multiple cloud platforms, potentially benefiting competitors such as Palo Alto Networks and CrowdStrike in the near term.

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