Google acquires cybersecurity startup for $32B

Google acquires cybersecurity startup for $32B

  • 18.03.2025 20:35
  • bizjournals.com
  • Keywords: Cybersecurity

Google acquired cybersecurity startup Wiz for $32B as part of Google Cloud. The deal caps a yearlong acquisition process involving Alphabet Inc., with Wiz's founders having previously sold Adallom Inc. to Microsoft in 2015.

Alphabet ReportsGOOGLsentiment_satisfied
open_in_newOriginal article

Estimated market influence

Google LLC

Positivesentiment_satisfied
Analyst rating: N/A

Acquired Wiz for $32B to strengthen Google Cloud's cybersecurity offerings.

Alphabet Inc.

Alphabet Inc.

Positivesentiment_satisfied
Analyst rating: Buy

Offered $23B initially but later successful acquisition at $32B.

Context

Analysis and Summary: Google Acquires Cybersecurity Startup Wiz for $32B

Key Facts and Data Points

  • Acquisition Details:

    • Google (Alphabet Inc.) acquired Wiz, a cloud cybersecurity company, for $32 billion.
    • The deal is an all-cash transaction, subject to closing adjustments.
    • Wiz will join Google Cloud once the acquisition is finalized.

  • Previous Acquisition Attempts:

    • In July 2022, Alphabet offered $23 billion for Wiz, but the deal fell through.
    • Wiz was founded in 2020 by CEO Assa Rappaport, CTO Ami Luttwak, VP of Product Yinon Costica, and VP of Engineering Roy Reznik.

  • Wiz's Background:

    • The founding team previously sold Adallom Inc. to Microsoft for $320 million in 2015.
    • Wiz raised $1.3 billion in a Series C funding round led by Andreessen Horowitz, Lightspeed Venture Partners, and Thrive Capital in 2024.

  • Wiz's Offices:

    • Headquarters: New York City.
    • Other offices: Israel, Arlington, Virginia, Austin, Texas, and Denver, Colorado.

  • Strategic Decision:

    • Wiz initially rejected Alphabet’s offer to pursue an IPO in 2024 but later accepted the acquisition deal.

Market Implications

  • Cybersecurity Market Growth:

    • The $32 billion acquisition highlights the growing importance of cloud cybersecurity and the increasing focus of tech giants on securing cloud infrastructure.

  • Google Cloud Expansion:

    • This deal underscores Google’s strategic push to strengthen its competitive position in cloud computing, particularly in cybersecurity, against rivals like Microsoft Azure and AWS.

  • Shift Toward Cloud Security:

    • The acquisition reflects a broader industry trend of shifting security focus to the cloud, as enterprises increasingly rely on cloud-based services.

Competitive Dynamics

  • Rivalry in Cybersecurity:

    • Google’s acquisition of Wiz positions it as a stronger competitor to Microsoft (which acquired Adallom in 2015) and other players like Palo Alto Networks and Fortinet.

  • Strategic Advantage:

    • By integrating Wiz’s technology into Google Cloud, Alphabet aims to offer end-to-end cybersecurity solutions for its cloud customers, potentially attracting new clients and retaining existing ones.

Strategic Considerations

  • Accelerated Innovation:

    • Rappaport emphasized that joining Google Cloud would “strap a rocket” to Wiz’s innovation efforts, suggesting faster product development and market expansion.

  • Customer Base Synergy:

    • Wiz’s customer base includes enterprises relying on cloud infrastructure, which aligns with Google Cloud’s target market.

Long-Term Effects

  • Potential Monopolistic Concerns:

    • The acquisition could raise antitrust concerns, given the size of the deal and Alphabet’s dominance in tech. Regulatory scrutiny may follow.

  • Impact on Startups:

    • The $32 billion valuation sets a high bar for cybersecurity startups, potentially discouraging future IPO attempts and encouraging acquisitions by larger firms.

Key Metrics and Statistics

  • Acquisition Value: $32 billion (all-cash).
  • Previous Offer: $23 billion (rejected in 2022).
  • Series C Funding: $1.3 billion.
  • Adallom Acquisition: $320 million by Microsoft in 2015.

Conclusion

Google’s acquisition of Wiz for $32 billion marks a significant move in the cybersecurity landscape, positioning Google Cloud as a stronger player in cloud security. The deal underscores the growing importance of cybersecurity in the cloud era and highlights Alphabet’s strategic focus on innovation and market dominance. While the acquisition offers immediate benefits, it also raises questions about competition and regulatory oversight in the tech industry.