Alphabet, Google’s parent company, is reportedly on the verge of acquiring cybersecurity startup Wiz for a staggering $23 billion, reports WSJ. If finalized, this deal would be Alphabet’s largest acquisition to date. The majority of the funding of the deal is expected to be in cash.
Founded in 2020, the New York-based Wiz has quickly risen to prominence in the cybersecurity industry. Their platform functions as a centralized hub, integrating with various cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud Platform itself. This approach allows Wiz to ingest data from various sources and scan it for potential security vulnerabilities. This visibility and threat detection capabilities are likely a major draw for Google, especially at a time when the company is looking to solidify its position in the competitive cloud computing market. As for Wiz, joining the Google-parent could provide it with access to vast resources and a broader market reach. This, in turn, would likely accelerate Wiz’s growth.
Despite substantial growth, Google Cloud lags behind industry leaders Amazon Web Services (AWS) and Microsoft Azure. By integrating Wiz’s advanced cybersecurity solutions, Alphabet aims to enhance the security offerings of Google Cloud, making it more competitive and appealing to large enterprises. This development also comes at a time when Alphabet is under intense scrutiny from antitrust regulators. Given Alphabet’s existing antitrust issues, the proposed acquisition of Wiz is likely to face even more intense scrutiny from regulators. So far, the US Department of Justice has filed multiple lawsuits against Google, accusing the tech giant of anti-competitive practices. Given this backdrop, the Wiz acquisition will likely attract considerable regulatory attention and potentially complicate the finalization of the deal.
Alphabet has a history of acquisitions in the cybersecurity space. In 2022, it acquired Mandiant for $5.4 billion, which was one of its largest deals until now. The acquisition of Wiz is valued at more than four times the Mandiant deal. Wiz, with its $12 billion valuation after a recent funding round, might seem like a smaller player compared to the tech giant Google. However, the startup has an impressive growth trajectory. In a short period, Wiz has achieved $350 million in annual recurring revenue.
