Google has made the biggest acquisition in its history. The company’s parent company, Alphabet, is purchasing cloud security startup Wiz for $32 billion. The transaction has been confirmed.
Sources previously described the deal as a $33 billion deal. This includes the billion dollars that Google is paying above the acquisition price in the form of a retention bonus, making sure everyone stays after they get it. There are 1,700 people working in the company, and an average of over $588,000 per employee (the actual number likely to rise or fall depending on each salary).
Wiz will continue to be an independent platform that works not only for Google Cloud Platform, but for all cloud providers. There will be more jobs to expand your business, and perhaps more acquisitions.
Our sources show that Wiz currently has its annual recurring revenue of $700 million. This transaction is described to us as similar to that between LinkedIn and Microsoft in terms of autonomy within a larger organization. (It should be noted that LinkedIn uses many Microsoft services and increases it over time.
The transaction will require regulatory and other approvals before closing. The company is expected in 2026. Previously, Google’s biggest acquisition was to buy Motorola Mobility for $12.5 billion in 2011.
This acquisition has been repeated over almost a year. It looked like it was back this week at a price tag of $30 billion.
Google Cloud CEO Thomas Kurian is currently in Europe, and New York-based Wiz CEO Assaf Rappaport is currently in Israel. From what we understand, Kurian is leading this contract, and Wiz will come under his wings and lead a big push to the company’s cloud security.
“Google Cloud and Wiz share a joint vision for making cybersecurity available to organizations of all sizes and industries,” he said in a statement today. “A growing number of companies can prevent cyberattacks, including highly complex business software environments, will help organizations minimize the costs, confusion and hassle caused by cybersecurity incidents.”
Some backstory. Last year, Google offered to buy Wiz for $23 billion, but consultations fell apart, sources said concerns about antitrust issues, Wiz’s autonomy over development under Google Cloud, and even price. At the time of contract talks, With was valued at $12 billion at the beginning of the year, based on $1 billion in funding.
Interim, there is a new US president who believes that the new regulatory regime will lead to a more favorable environment for large-scale technology acquisition that could have been previously impeded.
Google is interested in scooping up the Wiz into a turbocharged turbocharged in two areas. EnterpriseCloud is a business that lags behind AWS and Microsoft Azure. Security is the area that offers several products (mandiant, one of its important parts), but there is nothing in the size, scale, or growth trajectory of the Wiz.
Wiz is particularly appealing as it comes to Google Cloud leading the large existing business. Currently, it plans to double the annual recurring revenue last year to $1 billion.
The Wiz acquisition works potentially or to offset what could potentially appear in other major areas where Alphabet is betting: AI.
“The growing role of AI and the adoption of cloud services have dramatically changed the security environment for our customers, making cybersecurity increasingly important in preventing urgent risks and protecting national security,” Google said in today’s announcement.
Shortly after the contract first collapsed in 2024, With executed a secondary sale at a $16 billion valuation. In other words, this acquisition doubles its valuation. This is a big breakdown for Wiz investors, including about two dozen other things like Sequoia, CyberStarts, Index Ventures, Salesforce, Thrive Capital, Greenoaks, and more.
Rumors were that the founder had previously co-founded and sold security startups with Microsoft, becoming the anchor for the company’s cloud security business, and was in the fundraising process with even higher ratings.
On the scene of Discrupt last year, Rappaport did not rule out the possibility of a future acquisition, but he also confirmed that it was Wiz that left the deal, describing it as “the toughest decision ever,” but also the “right choice.”
In purely economic outcomes, his instincts appear to be true.
I’ll listen to investors’ calls later today and update them in more detail when this story appears.
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