A person close to Google parent company Alphabet told TechCrunch that the company is in advanced talks to buy Wiz for $23 billion. Previously mentioned By The Wall Street Journal.
Wiz, a cybersecurity startup founded in 2020, was approached by Thomas Kurian, Google’s head of cloud computing, a few weeks ago, the source said. Negotiations have since moved quickly and the two sides have tentatively agreed on a purchase price.
The source said that a deal of this size faces many obstacles and details that need to be resolved, but he did not specify what the obstacles are. According to the source, the deal negotiations could take another week to 10 days, and the chances of its failure could reach 50%.
The offered price is expected to more than double Wiz’s most recent private valuation of $12 billion, which the company achieved in May when it raised $1 billion in a Series E.
Wiz has seen astronomical growth. The company hit $100 million in annual recurring revenue just 18 months after launch, making it one of the fastest-growing companies ever. In May, Wiz announced that it had hit $350 million in annual recurring revenue. Its growth has accelerated since then. Its annual recurring revenue is now $500 million, and it plans to hit $1 billion in annual recurring revenue next year, the person said.
Given its rapid growth, Wiz always intended to go public, but it had not planned to launch its offering this year or in 2025. The company was not looking for a buyer until Google approached it.
However, Google Cloud could provide Wiz with strong revenue synergies, meaning Wiz could have a better chance of selling its product to the tech giant’s customers.
If the $23 billion deal is reached, Wiz would be valued at 46 times its projected 2025 annual revenue and 23 times its projected 2025 annual revenue. By comparison, Wiz’s main competitor, Palo Alto Networks, is trading at more than 14 times its past 12-month revenue. Google appears willing to pay a roughly 300% premium to Wiz’s closest competitor.
Wiz’s backers include Andreessen Horowitz, Cyberstarts, Index Ventures, Insight Partners, and Sequoia.