Wiz’s decision was communicated in an internal memo from CEO Asaf Rapaport that highlighted the company’s renewed focus on pursuing an IPO and achieving tangible growth goals, Reuters reported.
“While we received a very modest offer, I am confident that this is the right decision for Wizz with the incredible team at Wizz,” Rapaport wrote, without naming Google or Alphabet, according to Reuters. “Wizz’s goal is to achieve $1 billion in annual recurring revenue, and I believe it can achieve this milestone independently.”
Although acquisition rumors have been circulating for over a week, neither Google nor Alphabet have commented on the matter.
“We think the market has done a good job of validating Wiz,” said Neil Shah, vice president of research at Counterpart Research. “An offer that is almost twice the company’s valuation is very attractive to investors.”
Previous reports said Alphabet was in talks to acquire Wizz for around $23 billion, a significant increase from the $12 billion valuation that Wizz received after a $1 billion funding round in May. A deal would have significantly bolstered Google’s cloud computing arm, which currently lags behind rivals like AWS and Microsoft Azure.
Wiz provides AI-based, cloud-based cybersecurity solutions that help enterprises identify and mitigate critical risks on cloud platforms. They work with multiple cloud providers, including Microsoft and Amazon, and are used by a wide range of companies, from Morgan Stanley to DocuSign. Wiz has 900 employees across the U.S., Europe, Asia, and Israel.
Wiz’s decision to pursue an IPO instead of a Google sale appears to be a strategic move to maintain independence while expanding operations and revenue. Rapaport’s memo, reported by Reuters, reflects his strong belief in Wiz’s potential. “Wiz is on a growth trajectory through innovation and dedication, and is committed to delivering exceptional value to our customers,” Rapaport wrote.
The breakdown in talks marks another setback for Alphabet’s recent acquisition efforts, following its recent decision to scrap its acquisition of online marketing software company HubSpot. The Wizz deal would have been Alphabet’s second major cybersecurity acquisition, following Google’s recent acquisitions of Mandiant for $5.4 billion and Siamplify for $500 million, but Wizz is a smaller deal.
Counterpart Research’s Shah added, “Given Wiz’s current growth trajectory and the fact that the cloud security market is expected to grow to $6 billion annually over the next five years, and the overall cybersecurity market to $200 billion, there could not have been a better opportunity for Google.”
Wiz’s management is optimistic about the future. Wiz plans to drive growth by leveraging its strong cybersecurity technology and significant market presence. Reuters quoted Rappaport as saying, “The path forward for Wiz is clear, and we will continue to innovate and lead in the cybersecurity space.”
We’ve reached out to Google and Wiz for comment on the Reuters report, but have not yet received a response.
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Source: www.itworld.co.kr
