Deal over 23 billion - That's behind Google's spectacular Wiz acquisition
## Contents
- What is Wiz for a Company?
- Who is Behind Wiz?
- Why does Alphabet want to acquire Wiz?
- What is the price for Wiz in discussion?
What is Wiz for a Company?
The cybersecurity company was founded only four years ago and has grown rapidly since then. Wiz offers cloud-based cybersecurity solutions that allow real-time engagement with threats based on artificial intelligence. Cloud providers like Microsoft, Amazon, and Google are among the company's partners. According to Wiz's own statements, 40% of Fortune-100 companies are customers of the company. In Germany, companies like BMW, Siemens, and Otto use the services of the American-Israeli startup.
Who is Behind Wiz?
Four former Israeli army officers founded the company. CEO Assaf Rappaport and his co-founders Ami Luttwak, Yinon Costica, and Roy Reznik, according to the "Wall Street Journal," each own roughly nine percent of the company. They met each other in the "Unit 8200" of the Israeli military, which is responsible for cyber intelligence and has produced several successful startup founders. The cybersecurity firm Palo Alto Networks was also founded by former members of the unit.
Rappaport and his team have gained experience with startup founding through their first cybersecurity startup Adallom, which they founded in 2012 and sold to Microsoft for $320 million three years later. They then worked for Microsoft's cloud division Azure for a few years before founding Wiz in 2020. Their goal was also here: rapid growth and a quick exit. The first has already been achieved: Wiz is one of the fastest growing startups in the world. And if the exit also succeeds, the founders' coffers will be filled.
Why does Alphabet want to acquire Wiz?
Alphabet has not made a major acquisition for a long time. The last spectacular acquisition dates back to 2012, when the search engine giant acquired Motorola's mobile division for $12.5 billion. With the current plans, Alphabet wants to make up ground in the cloud business. Google is currently only the number three player here, far behind Amazon and Microsoft.
With Wiz's security solutions, Google could particularly catch up with Microsoft. The cloud division of the software giant was attacked by hackers in the summer of 2023 – allegedly from China – who managed to gain access to the data of various government agencies. The investigation by the US Cybersecurity Agency CISA ended in a disastrous verdict for Microsoft, which did not even notice the hacker attack itself. The recommendation is for the company to focus on security in its cloud service.
Given the increasingly geopolitical threat landscape, data security is becoming an important feature for companies, organizations, and authorities that rely on cloud services. With Wiz, Google would have an important sales argument in hand. Additionally, it would be a step for the search engine giant to become less dependent on income from internet advertising.
According to the "Wall Street Journal," the price for Wiz is expected to be around $23 billion. The planned transaction is supposed to mostly be settled in cash and could happen soon, Reuters reports, citing an insider. The company raised $1 billion in financing in May. Wiz was valued at $12 billion during that round. Google is offering nearly double that amount for the startup.
What could derail the acquisition?
The talks are reportedly in an advanced stage, according to the "Wall Street Journal" and Reuters. But of course, they could still fail. However, even if a deal is reached, there is still one obstacle to overcome. The US government under President Joe Biden has been tougher on Google than its predecessors. Last year, a cartel process against Google began: The US Justice Department accuses the company of misusing its dominant position in internet advertising. Google has also been a target of cartel investigations in Europe.
Whether the wind will turn in favor of the tech giant remains to be seen. If Donald Trump wins the November election, the cards could be reshuffled. The Republican is seen as business-friendly.
Microsoft actively collaborates with Wiz, leveraging its cloud-based cybersecurity solutions for real-time threat engagement. Google, being part of Alphabet, is pursuing a potential acquisition of Wiz to enhance its cloud security offerings, aiming to compete more effectively against competitors like Microsoft.
