Wiz to be acquired by Alphabet: InvestX Reaction
Alphabet, Google’s parent company, is set to acquire Wiz for $32 billion, marking the largest deal in the company’s history and the biggest transaction in cybersecurity history. The transaction, conducted in an all-cash agreement, aims to bolster Google Cloud’s security capabilities and expand its presence in the rapidly growing cybersecurity sector.
Founded in 2020, Wiz offers a cloud security platform that enables organizations to rapidly secure their cloud infrastructure at a scale, allowing enterprises to identify and address security issues within their public cloud environments. Wiz collaborates with major corporations like Microsoft and Amazon. Wiz is one of the fastest-growing SaaS companies in the world. It reached $100M (and $200M) in ARR in record time, a historic feat achieved only by a few companies. Wiz hit $500M in ARR in 2024 and plans to double that to $1B by 2025. The company was valued at $12 billion in May 2024 and later at $16 billion during an equity offering. This acquisition nearly doubles its previous valuation.
In July 2024, Wiz turned down a $23B acquisition offer from Alphabet, stating it wished to take
the company public. One of the reasons the negotiations fell through previously was the inability of the two companies to agree on whether Wiz would remain as a separate division or be integrated into Google Cloud. The deal’s collapse was also influenced by the intense regulatory scrutiny on large transactions during the Biden administration.
This acquisition represents an investment by Google Cloud to accelerate two large and growing trends in the AI era: improved cloud security and the ability to use multiple clouds (multicloud)
—Google blog post
Wiz will operate as an independent platform within Google Cloud, maintaining compatibility with multiple cloud providers in the new deal. The deal faced regulatory scrutiny in earlier negotiations, with concerns over antitrust violations. However, both parties are optimistic that the current U.S. administration and the new FTC chair, Andrew Ferguson, will adopt a more lenient stance.
Investors are noting a rise in M&A activity. In many instances, the renewed negotiations are linked to the expectation that FTC Chair Andrew Ferguson will be less stringent on large transactions compared to former Chair Lina Khan.
Wiz was purchased by Fund IV in February 2024 at a valuation of around $10.3B. This $32B acquisition represents a 210% increase from our original valuation. Wiz represents approximately 2.3% of the Fund’s committed capital. We will be making a distribution to unitholders upon the closing of the transaction. The deal is expected to close in 2026, subject to regulatory approvals.