A smartphone Wiz website arranged in New York, USA on Tuesday, July 16th, 2024.
Gabby Jones | Bloomberg | Getty Images
Google On Tuesday, it signed a “decisive agreement” to acquire Wiz, a New York-based cloud security startup.
Google’s biggest deal in history will bolster the company’s security technology in a world that drives artificial intelligence and cybersecurity threats. With has become part of the company’s cloud business and said Google expects it to close in 2026.
“Google Cloud is a leader in Cloud Infrastructure with deep AI expertise and a proven track record of industry-leading security innovation,” Google said in the release. “By bringing all this to WIZ, the solution will be even better, more scalable and profitable for all major cloud customers and partners.”
Last year, With told employees he would move away from the possibility of a $23 billion acquisition by Google and instead pursue an IPO. However, the IPO market has not yet been opened in a significant way since trading slowed since 2022. Tech companies have expressed optimism that the Trump administration will open the door to a massive takeover after four difficult years under President Joe Biden.
A source familiar with the issue told CNBC that Wiz left the deal in July due to anti-trust and investor concerns.
“It’s hard to say no to such a humble offer,” Wiz co-founder Assaf Rappaport wrote to employees in a note obtained by CNBC at the time.
A month later, a federal judge ruled that Google held its monopoly in the search market four years after the government filed its groundbreaking lawsuit.
Alphabet CEO Sundar Pichai is one of a group of renowned technical executives who attended President Donald Trump’s inauguration in January, and the company has donated $1 million to the inauguration fund.
Center stage on the first day of Web Summit 2021 at Assaf Rappaport, Wiz, Altice Arena in Lisbon, Portugal.
Harry Murphy | SportsFile | Getty Images
Before the latest talk with Google was reported, Wiz had set its sights on the IPO and set a recurring revenue of $1 billion a year. In a July memo, Rappaport wrote that the company will pursue these milestones.
Wiz was founded in 2020 and grew rapidly under Rappaport, reaching $100 million in annual revenues just 18 months later. The company’s cloud security products include prevention, active detection and response. This will appeal to large companies and help Google compete with Microsoft, which sells security software.
“Being part of Google Cloud effectively binds rockets to the back. It accelerates the percentage of innovation faster than what you can achieve as a standalone company,” Rappaport said in a blog post Tuesday.
Google has a long history of M&A, but it’s far from Megadeals. Before Wiz, the biggest purchase was the $12.5 billion acquisition of hardware marker Motorola in 2012. Two years later, the company sold assets to Lenovo for $2.9 billion. Google has also previously acquired cybersecurity, paying Mandiant $5.4 billion in 2022.
Alphabet closed the year at $96 billion with cash and marketable securities.
Wiz’s products will continue to work on competitor platforms such as Amazon Web Services, Microsoft Azure and Oracle Cloud, the company said. The Wall Street Journal first reported that the company was having a high level of discussion.
Alphabet’s stock fell 3% on Tuesday, and is now down 16%.
– CNBC’s Jennifer Elias and Jordan Novet contributed to this report.
