Google revives talks to acquire Wiz at higher valuation

Google revives talks to acquire Wiz at higher valuation

  • 17.03.2025 16:11
  • techcrunch.com
  • Keywords: Acquisition, Mergers and Acquisitions

Google's parent company, Alphabet, is in advanced talks to acquire cloud cybersecurity startup Wiz for around $30 billion, up from a previous near-deal at $23 billion last summer. The acquisition is driven by Wiz's cloud security products and its attractive annual recurring revenue of $500 million, with plans to reach $1 billion by 2025.

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Estimated market influence

Alphabet

Alphabet

Negativesentiment_dissatisfied
Analyst rating: Buy

Alphabet is considering acquiring Wiz, which would enhance its cloud security offerings.

Google Cloud

Positivesentiment_satisfied
Analyst rating: N/A

Google Cloud sees Wiz's products as a good fit for their customer base and is looking to integrate them into their services.

Wiz

Positivesentiment_satisfied
Analyst rating: N/A

Wiz's cloud security products are attractive to Google Cloud, which could lead to a significant acquisition by Alphabet.

Context

Analysis of Google's Revived Acquisition Talks with Wiz

Key Facts and Data Points

  • Previous Valuation: $23 billion in July 2024 (did not materialize).
  • Current Proposed Valuation: Around $30 billion.
  • Wiz's ARR:
    • $500 million in July 2024.
    • Targeting $1 billion by 2025.
  • Funding Round:
    • Last round: $1.6 billion in May 2024.
    • Post-funding valuation: $16 billion (via employee tender offer in late 2024).
  • Founders: Four former Israeli military officers, previously co-founded Adallom (acquired by Microsoft).
  • Investors: Andreessen Horowitz, Cyberstarts, Index Ventures, Insight Partners, Sequoia.

Market Trends and Business Impact

  • M&A Activity Increase: TechCrunch reports a rise in M&A activity, potentially linked to regulatory shifts under FTC Chair Andrew Ferguson.
  • Regulatory Scrutiny: Previous deal breakdown due to high scrutiny during the Biden administration.
  • Strategic Fit for Google Cloud:
    • Wiz's cloud security products align with Google Cloud's customer base.
    • High ARR growth signals strong market demand.

Competitive Dynamics

  • Potential Integration Challenges: Disagreements over whether Wiz would remain a separate division or integrate into Google Cloud previously derailed talks.
  • CFO Hire: Wiz hired Fazal Merchant, suggesting possible IPO readiness despite denying immediate plans for public offering.

Long-Term Effects and Strategic Considerations

  • Premium Valuation: $30 billion acquisition reflects Wiz's rapid growth and strategic importance in cloud security.
  • Regulatory Environment: Future deals may hinge on evolving antitrust policies under new FTC leadership.
  • IPO Speculation: CFO hire raises questions about Wiz's long-term plans, despite current focus on acquisition.

Industry Implications

  • Cybersecurity Market Growth: Highlights increasing demand for cloud security solutions.
  • Tech Mergers and Acquisitions: Reflects broader trend of consolidation in the tech industry to strengthen competitive positions.