Google is reportedly in advanced negotiations to acquire the cybersecurity startup Wiz for $23 billion, marking the tech giant’s largest acquisition to date. The Wall Street Journal reported on Sunday, July 14, citing sources familiar with the matter, that the deal could be finalized soon.
How Will This Acquisition Impact Google Cloud?
Alphabet, Google’s parent company, sees this potential acquisition as a significant move to bolster its cloud business. Google Cloud grew by 28%, reaching $9.57 billion in revenue in the first quarter of this year. Wiz offers a comprehensive cloud security solution, integrating data from Amazon Web Services, Microsoft Azure, Google Cloud, and other platforms to scan for security risks.
Founded in 2020 by former Microsoft employees Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik, Wiz has rapidly gained prominence in the cybersecurity industry. The company recently raised $1 billion in a Series E funding round, bringing its valuation to $12 billion. Wiz’s total funding now stands at $1.9 billion, with annual recurring revenue reported at $350 million.
The company’s backers include notable investors such as Andreessen Horowitz, Lightspeed Venture Partners, Thrive, Greylock, Wellington Management, Cyberstarts, Greenoaks, Howard Schultz, Index Ventures, Salesforce Ventures, and Sequoia Capital.
Wiz’s cloud security services provide comprehensive insights into a company’s cloud infrastructure, an attractive feature for large organizations with extensive computing resources. The startup is supported by notable investors, including Israeli venture capital firm Cyberstarts, Index Ventures, Insight Partners, and Sequoia Capital.
If the acquisition proceeds, it will underscore Google’s significant investment in cybersecurity, particularly as cyber threats from nation-states and criminal organizations continue to escalate. Google’s previous substantial investment in cybersecurity includes the $5.4 billion acquisition of Mandiant two years ago.
Google’s Antitrust Concerns
However, Google is currently facing heightened antitrust scrutiny, with the Justice Department filing two antitrust lawsuits against the company. The most recent litigation, filed in 2023, specifically targeted Google’s acquisition practices.
Despite these challenges, the talks with Wiz indicate that Google remains eager to pursue mergers and acquisitions. This comes after Google’s reported interest in acquiring sales software maker Hubspot, a pursuit that has reportedly cooled.
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