Wiz’s $32 billion all-cash acquisition by Google Parent Alphabet promises a huge payday for early-stage investors in cybersecurity startups.
The deal is a big win for Sequoia, one of the most well-known VC companies, which is supposed to earn $3 billion, about 25 times the money they invested in the company. Despite the substantial returns of Sequoia’s Limited Partners, their percentage benefits are far less than those of another early Wiz supporter, Israel-based VC CyberStarts.
Cybersecurity-centric Cyberstotte invested $6.4 million in With’s seed round from its first $54 million fund in February 2020.
Today, the fund owns 4.1% of WIZ. That means that, according to people familiar with the company’s performance, they are poised to make a whopping $1.3 billion on the deal. Cybershooter also previously sold 120 million WIZ shares in secondary transactions, bringing the fund’s total return to $1.42 billion.
CyberStarts also participated in the late round of Wiz, investing a total of $40 million from the Opportunity Fund. Those investments are now worth $128 million, with a more modest return of 3.2 times the investment capital, a person familiar with Cyberstote’s performance told TechCrunch.
“CyberStarts will have one of the best return funds in VC history,” writes Shai Goldman, partner at Next Wave NYC, about X.
CyberStarts was not the usual emerging VC manager when it closed its first fund in 2018. The company was launched by Girilanan, who previously spent nearly nine years as a general partner of Sequoia, leading Israeli investment strategies.
The $54 million small fund has already achieved a 26x multiple with limited partner capital. And it doesn’t count other potential exits, such as the island.
Index Ventures, which owns a 12% stake in Wiz, is poised to make more than $3.8 billion once sales are completed, Reuters reports.
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