Kurian from Google Reportedly Nearing a $23 Billion Deal with Wiz, Could Finalize Within a Week, According to Insider

Alphabet, the conglomerate above Google, is reportedly nearing a deal to purchase Wiz for $23 billion, according to information given to TechCrunch by an insider. The Wall Street Journal had initially disclosed these negotiations.

Launched in 2020, cybersecurity innovator Wiz caught the attention of Google’s cloud segment leader, Thomas Kurian, a few weeks prior, the informant revealed. Swift discussions followed, culminating in an in-principle agreement on the acquisition price.

The informant also noted that sealing a transaction of this scale comes with considerable challenges and pending details, though the specifics were not divulged. They mentioned the deal has a 50% likelihood of disintegration and could require another week or ten days to conclude the negotiations.

The proposal values Wiz significantly above its latest $12 billion valuation, attained in May during a $1 billion Series E funding round.

Wiz’s growth trajectory has been nothing short of remarkable. Only 18 months following its inception, it reported an annual recurring revenue (ARR) of $100 million, ranking it amongst the quickest to achieve such a milestone. As of May, the company’s ARR soared to approximately $350 million, with the current ARR at $500 million and projections to double to $1 billion by the next year, said the source.

Despite its exponential growth and intentions for an initial public offering, Wiz had not anticipated a sale before Google’s approach.

Nonetheless, the potential integration with Google Cloud could unlock significant revenue opportunities for Wiz, enhancing its product’s appeal to Google’s clientele.

Should the acquisition materialize at the quoted $23 billion, it would peg Wiz’s valuation at 46 times its present ARR and 23 times its anticipated ARR for 2025, vastly outstripping the market norms exemplified by its chief rival, Palo Alto Networks, which trades at a bit over 14 times its past year’s revenue. Google thus seems prepared to offer a nearly threefold premium over Wiz’s nearest market comparison.

Supporters of Wiz include prominent investment firms such as Andreessen Horowitz, Cyberstarts, Index Ventures, Insight Partners, and Sequoia.