Alphabet, Google’s parent company, is back at the negotiation table with cloud cybersecurity startup Wiz, reigniting acquisition talks that stalled last year. According to sources familiar with the matter, this latest round of discussions is centered around a higher valuation, with the deal potentially reaching a staggering $30 billion.
Last summer, both companies came close to an agreement at a $23 billion valuation. However, those talks broke down due to disagreements over how Wiz would be integrated into Google’s operations. Now, the stakes are even higher. The Wall Street Journal reports that Alphabet is considering paying around $30 billion to secure the deal.
Leading the effort once again is Thomas Kurian, CEO of Google Cloud. For Google Cloud, Wiz represents a strategic addition to strengthen its cybersecurity offerings. With Wiz’s products tailored for cloud environments, they align perfectly with Google Cloud’s customer needs.
Wiz has demonstrated remarkable growth since its founding in 2020. By July last year, the company was generating an annual recurring revenue (ARR) of $500 million. Projections suggest Wiz could double that figure, hitting $1 billion in ARR by 2025. Such financial performance makes it an attractive target for acquisition, especially in a sector where demand for robust cloud security solutions continues to surge.
Despite these strong financials, the $30 billion price tag would be a significant premium. Wiz’s last external funding round in May valued the company at $12 billion, with a subsequent employee tender offer pushing the valuation to $16 billion later in the year. This potential acquisition would mark a major leap in value in just a short span.
Wiz’s leadership team, made up of four former Israeli military officers, brings extensive experience in cybersecurity. They previously founded Adallom, another cloud security firm acquired by Microsoft for $320 million. Their expertise has been instrumental in positioning Wiz as a leader in the cloud cybersecurity market.
While Wiz has publicly stated it has no plans for an IPO in 2025, the company recently hired Fazal Merchant as its Chief Financial Officer. Merchant, a veteran executive from DreamWorks and Tanium, is seen as a strategic addition. CFO appointments like this often signal preparations for potential market moves, including acquisitions or public offerings.
One sticking point in the earlier negotiations was the operational future of Wiz post-acquisition. Reports indicate Alphabet and Wiz couldn’t agree on whether the startup would maintain independence or be absorbed entirely into Google Cloud. That issue, combined with increased regulatory scrutiny under the Biden administration, contributed to the breakdown of talks last year.
Regulators have been closely monitoring large tech mergers, a factor that could again impact this deal. However, some investors believe the regulatory environment may be shifting. With Andrew Ferguson now chairing the FTC, there are hopes for a more measured approach compared to the aggressive antitrust stance taken by his predecessor.
The renewed discussions also reflect a broader trend: a noticeable uptick in merger and acquisition activity across the tech industry. Insiders say companies are feeling more confident about pursuing large deals, driven by market recovery and shifting regulatory winds.
Wiz, with backing from heavyweight investors like Andreessen Horowitz, Cyberstarts, Index Ventures, Greenoaks, Insight Partners, and Sequoia, is well-positioned for a lucrative exit. However, whether this deal crosses the finish line remains to be seen.
For now, both companies are keeping quiet. A spokesperson for Wiz declined to comment on the ongoing discussions. Should the deal proceed, it would mark one of the most significant acquisitions in the cybersecurity space, cementing Google’s commitment to expanding its cloud security capabilities.
