Wiz rejects $23 billion Google acquisition in favor of IPO

Cybersecurity startup Wiz turned down a $23 billion takeover bid from Google parent Alphabet, halting what would have been the biggest acquisition in the search giant’s history. In an internal memo seen by CNBCWiz co-founder Assaf Rappaport said the company would instead pursue an initial public offering.

“Saying no to such humiliating offers is difficult,” Rappaport said in the memo sent to Wiz employees. If the acquisition had happened, it would have doubled the valuation of US$ 12 billion which Wiz announced in May after the company raised $1 billion in private funding. According to the memo, Wiz will now focus on reaching $1 billion in annual recurring revenue alongside the IPO — goals the security company had set before its talks with Google. Neither Wiz nor Alphabet officially acknowledged that a deal was being discussed.

Wiz offers cloud-based security solutions to enterprise customers, an attractive target that could have put Google in a better position to compete with industry leaders Microsoft and Amazon. However, antitrust regulators have increasingly fixated on deals made by Big Tech in recent years, and according to CNBCantitrust and investor concerns were cited as reasons for Wiz to abandon the deal.

The Justice Department has already initiated two ongoing antitrust cases against Google over its search engine and digital advertising businesses. Google purchased two cybersecurity companies in 2021 – Siemplify and Mandiant – for $500 million and $5.4 billion, respectively, with the latter company most recognized for discovering the SolarWinds hack.