Wall Street Journal: Google to acquire Wiz for $23 billion

Google’s parent company Alphabet Inc is in advanced negotiations to acquire Israeli cybersecurity startup Wiz for about $23 billion, according to people familiar with the matter who spoke to the Wall Street Journal.

The deal could be struck soon, assuming negotiations don’t stall, and would be the largest acquisition in Alphabet’s history, they said.

Wiz’s valuation has risen significantly since it was founded in 2020 by Israeli CEO Assaf Rappaport and a number of his colleagues.

The company, which provides cybersecurity software for cloud computing, raised $1 billion earlier this year with a valuation of $12 billion.

It’s one of the few startups outside the AI sector to raise highly rated funding in 2024, and the startup works with major global companies such as Salesforce and BMW.

Despite its market capitalization of more than $2 trillion, Google has been more conservative on acquisitions than some of its big tech competitors in recent years.

It avoided massive acquisitions such as Microsoft’s $26 billion acquisition of LinkedIn or the $75 billion acquisition of Activision Blizzard.

Google’s largest acquisition was $12.5 billion of Motorola Mobility in 2012.

Alphabet is seeking the deal under intense antitrust regulatory oversight of the company and other tech giants.

The acquisition could also help boost Alphabet’s efforts in cloud computing, an important and growing sector in which the company has lagged behind its competitors, the Wall Street Journal noted.

Google isn’t as strong in the cloud computing market as in the search and advertising market on the Internet.

The company is third only to Amazon and Microsoft, but is investing heavily in this fast-growing field.

Last year, Google Cloud revenue grew 26% and achieved operating profit for the first time.

Google is boosting its cybersecurity business, with a focus on cloud computing, and its largest recent acquisition — and its second-largest — was the $5.4 billion acquisition two years ago of another security company, Mandiant.

Wiz was founded in 2020 by an Israeli team: CEO Assaf Rappaport, Chief Technology Officer Ami Lotwak, Executive Vice President of Products Yinon Kostika, and Executive Vice President of Research and Development Roy Reznik.

Assaf Rappaport served as general manager of research and development at Microsoft Israel after selling his former company, Adalom, to Microsoft for $320 million in 2015.

The rest of the founders of Wizz have worked with Rappaport since his days in the Israeli army and held various positions at his former company, Adalom, as noted by a Forbes report.

Rappaport and his three comrades met during compulsory military service in the IDF, and joined Unit 8200, the elite intelligence unit. Before Rappaport left for a smaller, more clandestine elite cyber group called Unit 81, according to a Forbes report.

Wiz is headquartered in New York and has other offices in the United States and Israel.

The startup is collaborating with some of the largest cloud computing companies, including Amazon, Microsoft and Google, according to its website.

Companies have invested heavily in cloud services to accelerate their work and improve their IT flexibility, but this shift has been accompanied by significant security changes in these organizations, as data and network structures have become more complex, and cyber-attacks have increased with them even more, providing opportunities for hackers to find ways to penetrate systems in those companies.

By ingesting data from the cloud platforms of Amazon, Microsoft, Google and other companies, Wiz scans applications, data and processes in the network for any security risk factors and provides a set of detailed presentations to its users to see where those risks are, as well as how to fix them.

Its platform currently covers about 13 areas, such as code security and supply chain security, as noted by a report on the tech TechRank website.