High Stakes: Google Resurfaces Acquisitions Talks with Wiz!

Google's parent company, Alphabet is back at it with advanced talks to acquire cloud cybersecurity startup Wiz. Formerly, both companies were close to securing a deal at a $23 billion valuation last summer, but the transaction failed to materialize. This time, the valuation has gone up after some rounds of discussions, with an insider pegging the next ice around $30 billion, as reported by The Wall Street Journal.

Seeking Global Expansion

Google is already a household name but there's still room for more as Thomas Kurian, head of Google’s cloud division, is again leading the effort. Google Cloud views Wiz’s cloud security products as a good fit for its customer base, and Wiz’s annual recurring revenue (ARR) is attractive too, standing at $500 million last July, with plans to hit $1 billion in ARR in 2025. 

The $30 billion earmarked for the deal would likely be quite the premium price tag. Wiz closed its last outside funding round of $1 billion at a valuation of $12 billion last May. Its valuation reportedly jumped to $16 billion in an employee tender offer late last year.

Although Wiz said it has no plans to take itself public in 2025, it hired Fazal Merchant, a former executive at DreamWorks, and Tanium as a chief financial officer. Sometimes hiring a CFO is a sign of getting books ready for a public offering.

Getting It Right 

Several reasons were given for the talks failing before, with the most important being the inability of the two companies to agree on whether Wiz would remain as a separate division or be integrated into Google Cloud, according to The Wall Street Journal. Additionally, high regulatory scrutiny for large transactions during the Biden administration contributed to the deal’s breakdown last summer, the insider familiar with the deal said. 

The New York and Israel-based Wiz was founded in 2020 by four former Israeli military officers who previously co-founded a cloud cybersecurity company called Adallom that Microsoft later acquired for $320 million. Wiz’s backers include Andreessen Horowitz, Cyberstarts, Index Ventures, Greenoaks, Insight Partners, and Sequoia.

So far, there's no comment from Wiz on the deal.