Google Confirms Plans to Acquire Cyber Security Startup Wiz for $32 Billion
Google is acquiring Wiz for $32 billion. The company’s acquisition of Wiz, the cloud security startup, will be the largest in its history. The acquisition of Wiz’s AI-powered cybersecurity solution will boost Google’s cloud business, Reuters reported.
Strategic Opportunities
In terms of autonomy, Google’s largest acquisition has been likened to the one that happened between Microsoft and LinkedIn. Wiz will continue to operate as an independent platform after the acquisition. Besides the Google Cloud Platform, the AI-powered cybersecurity platform will work across varied cloud providers.
“Google Cloud is a leader in cloud infrastructure, with deep AI expertise and a track record of industry-leading security innovation. Bringing all this to Wiz will help make their solutions even better and more scalable, benefiting customers and partners across all major clouds,” Google said.
The startup is also expected to hire more staff to expand its business. These will likely come from acquisitions that the startup has been pursuing over the last one year. Sources close to the startup say that its annual recurring revenue currently stands at $700 million.
The Alphabet and Wiz acquisition deal still has to undergo regulatory approvals before closure. Prior to the Wiz acquisition, Google’s largest acquisition was the purchase of Motorola Mobility in 2011 at a cost of $12.5 billion. Google Cloud CEO Thomas Kurian was leading the Wiz acquisition deal.
“Google Cloud and Wiz share a joint vision to make cybersecurity more accessible and simpler to use for organizations of any size and industry, enabling more companies to prevent cyber attacks, including in very complex business software environments, will help organizations minimize the cost, disruption and hassle caused by cybersecurity incidents,” Kurian said in a statement.
Previous Acquisition Attempts
This is not the first time that Google has expressed interest in acquiring Wiz. Last year, Google offered to acquire Wiz for $23 billion. However, the talks did not materialize due to concerns about antitrust issues and the startups autonomy for development when operating under Google Cloud.
The amount offered by Google also contributed to the collapse of the talks. Wiz was valued at $12 billion at the time when Google initiated deal discussions. This valuation was based on a $1 billion funding round that the startup had closed early last year. With the change of administration in the US Capitol, analysts believe the regulatory environment will be more supportive of big tech acquisitions.
Google’s interest in Wiz revolves around two areas, enterprise cloud and security. The tech giant seeks to leverage enterprise cloud to enhance its competitiveness against Microsoft Azure and AWS. Wiz’s cybersecurity business will enable the tech giant to boost its product offerings.
The startup has developed cloud security products that include active detection, prevention, and response. Its product portfolio has appealed to big techs and will help Google compete effectively in this area.
“Becoming part of Google Cloud is effectively strapping a rocket to our backs: it will accelerate our rate of innovation faster than what we could achieve as a standalone company,” Wiz co-founder Assaf Rappaport said on Tuesday.
High Valuation
Google is also looking to leverage Wiz enterprise cloud and cybersecurity to complement or offset the challenges or opportunity in AI where it is placing high stakes.
“The increased role of AI, and adoption of cloud services, have dramatically changed the security landscape for customers, making cybersecurity increasingly important in defending against emergent risks and protecting national security,” Google added.
Following the collapse of Wiz acquisition talks last year, the cyber security startup initiated a secondary sale at a $16 billion valuation. The current $32 billion acquisition deal doubles this valuation and presents a big windfall for Wiz investors that include Index Ventures, Sequoia, Salesforce, Cyberstarts, Thrive Capital, and Greenoaks among others,
