Alphabet, the parent company of Google, is set to acquire cloud security startup Wiz for a record-breaking $32 billion to $33 billion, according to sources familiar with the deal.
This acquisition, expected to be officially announced soon, will be the largest in Google’s history, surpassing its $12.5 billion purchase of Motorola Mobility in 2011.
While the agreement has been reached, the acquisition will still require regulatory and other approvals before finalization. As of now, neither Google nor Wiz has issued an official confirmation, although multiple reports confirm the deal is effectively sealed.
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Wiz to Operate Independently
Under the deal, Wiz will continue to function as an independent platform, maintaining its compatibility across multiple cloud providers, not just Google Cloud Platform. The acquisition is expected to lead to further expansion of Wiz’s team. Currently, Wiz generates around $700 million in annual recurring revenue (ARR), and the company is projected to reach $1 billion in ARR this year.
Sources have likened the acquisition’s structure to Microsoft’s purchase of LinkedIn, where the acquired company retains significant operational independence while leveraging the parent company’s infrastructure. However, as seen with LinkedIn’s increasing reliance on Microsoft services over time, there is speculation that Wiz could eventually integrate deeper into Google’s ecosystem.
Deal Revived After Previous Breakdown
Negotiations between Google and Wiz have been ongoing for nearly a year, experiencing multiple on-again, off-again phases. The most recent revival of talks occurred this week, with reports suggesting an initial $30 billion offer.
Google Cloud CEO Thomas Kurian has reportedly been leading the charge on the acquisition, with Wiz CEO Assaf Rappaport currently in Israel while Kurian is in Europe. Wiz would fall under Google Cloud’s umbrella, accelerating Google’s expansion into enterprise cloud security.
In 2023, Google initially offered $23 billion for Wiz, but the deal fell through due to concerns over antitrust regulations, Wiz’s independence under Google Cloud, and the valuation. At the time, Wiz had been valued at $12 billion following a $1 billion funding round earlier that year.
Favorable Regulatory Climate?
The regulatory landscape has shifted since the earlier failed negotiations, with a new U.S. administration now in place. Some industry analysts believe this change could lead to a more favorable environment for major tech acquisitions that might have previously faced roadblocks.
Google’s primary motivation behind the deal lies in strengthening two key areas: enterprise cloud services and cybersecurity. Despite its strong presence in the tech sector, Google Cloud continues to lag behind competitors like Amazon Web Services (AWS) and Microsoft Azure. By acquiring Wiz, Google gains a rapidly growing security platform to bolster its enterprise cloud offerings.
The acquisition comes amid Wiz’s rapid business expansion. The company surpassed $500 million in ARR last year and is on track to double that figure in 2024. Following the breakdown of the initial deal with Google, Wiz conducted a secondary sale at a $16 billion valuation and was rumored to be fundraising at an even higher valuation.
During an appearance at Disrupt last year, Wiz CEO Rappaport acknowledged the previous acquisition talks, stating that Wiz had ultimately walked away from the deal—a decision he described as “the toughest ever” but also “the right choice.” Given the significantly higher valuation at which Wiz is now being acquired, it appears that Rappaport’s instincts have paid off financially.
If the deal secures regulatory approval, it will mark a transformative moment for both companies, positioning Google Cloud as a more formidable player in the enterprise cloud security sector while giving Wiz access to Google’s vast resources for further growth.
Google parent Alphabet will acquire cybersecurity company Wiz in a $32 billion cash deal, the companies confirmed Tuesday. The acquisition, if cleared by regulators, would be Alphabet’s biggest on record, with Wiz joining Google’s Cloud business. Talks between the two companies were revived recently, after Wiz walked away from a $23 billion offer from Google last summer amid concerns about regulatory scrutiny. Wiz had cited intentions to explore going public.