Wiz CEO explains why he turned down a $23 billion deal
Assaf Rappaport, the co-founder and CEO of cloud security startup Wiz, said that turning down a $23 billion offer from Google was “the toughest decision
Assaf Rappaport, the co-founder and CEO of cloud security startup Wiz, said that turning down a $23 billion offer from Google was “the toughest decision ever,” but justified it by saying the company can get even bigger and reach $100 billion because cloud security is the future.
“I think we did the right choice,” Rappaport said on Monday at the annual TechCrunch Disrupt conference.
“We believe it’s bigger, definitely bigger than endpoint, bigger than networks, so the opportunity to become a 100 plus billion dollar company is there. We believe that the company that is going to…own cloud security in the world is going to be a 100-plus billion dollar company,” he added. “I’m not sure it’s going to be Wiz, but if we do the right things, and we execute, I think it’s…in our hands.”
Even then, it was not an easy decision to make, as he had to think about Wiz’s investors, as well as its employees.
“I was super nervous,” he admitted. But it was he and his co-founders who made that call. “At a healthy company with a healthy relationship with investors, it’s always the founder’s decision.”
Wiz rejects Google’s $23 billion takeover in favor of IPO
Had the deal gone ahead, it would have been the largest acquisition ever made by Google.
Cybersecurity startup Wiz has turned down a $23 billion takeover bid from Google’s parent, Alphabet, breaking off what would have been the largest acquisition in the search giant’s history. In an internal memo seen by CNBC, Wiz co-founder Assaf Rappaport said the company would instead pursue an initial public offering.
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“Saying no to such humbling offers is tough,” Rappaport said in the memo sent to Wiz employees. Had the acquisition gone ahead, it would have doubled the $12 billion valuation that Wiz announced in May after the company raised $1 billion in private funding. According to the memo, Wiz will now focus on achieving $1 billion in annual recurring revenue alongside the IPO — goals the security firm had set before its talks with Google. Neither Wiz nor Alphabet have officially acknowledged that a deal was being discussed.
Wiz offers cloud-based security solutions for enterprise customers, an attractive target that could have placed Google in a better position to compete with industry leaders Microsoft and Amazon. Antitrust regulators have increasingly fixated on deals made by Big Tech in recent years, however, and according to CNBC, both antitrust and investor concerns were cited as reasons for Wiz abandoning the deal.
The Justice Department has already launched two ongoing antitrust lawsuits against Google over its search engine and digital advertising businesses. Google purchased two cybersecurity firms in 2022 — Siemplify and Mandiant — for $500 million and $5.4 billion, respectively, with the latter company best recognized for uncovering the SolarWinds hack.