Google’s $23 Billion Deal to Acquire Cybersecurity Start-Up Wiz Collapses

Last week, Google seemed set to make its largest-ever acquisition by purchasing the cybersecurity start-up Wiz for $23 billion. However, on Monday night, Wiz informed its employees that the deal was canceled. Instead, the company plans to go public, as detailed in a memo obtained by The New York Times.

Wiz, aiming to reach $1 billion in recurring revenue before its initial public offering, decided to continue its independent growth despite the substantial offer. Wiz’s CEO, Assaf Rappaport, expressed confidence in the company’s path and noted that rejecting the offer was difficult but necessary.

The potential acquisition would have boosted Google’s cloud computing efforts and strengthened its cybersecurity capabilities against competitors like Microsoft. Google’s largest previous acquisition was Motorola Mobility for $12.5 billion in 2012, which it later sold at a loss. This proposed deal faced significant regulatory challenges, as Google is currently under scrutiny from U.S. regulators over antitrust issues.

The Biden administration has been strict on corporate mergers, with recent high-profile cases such as Microsoft’s attempt to acquire Activision and Amazon’s abandoned purchase of iRobot. A lengthy regulatory review could hinder Wiz’s progress, especially given its rapid growth, with revenue increasing from $100 million to $350 million annually in the past two years.

Rappaport mentioned that the interest in the company following the news of the Google deal has strengthened Wiz’s resolve to continue its independent development and enhance its platform.