The mergers and acquisitions market, which is still stagnant, may soon gain momentum.
One of the largest enterprise capital-backed startups in history.
Alphabetparent company GoogleIs supposedly We are in advanced talks to acquire a cybersecurity startup Wizard for about $23 billion. The deal, which could be Google’s largest ever, was first announced in Wall Street Journal.
In fact, the deal could be the largest ever for a VC-backed company, according to Crunchbase data. It’s even larger than Adobeill-fated $20 billion deal to acquire a design unicorn Figma in 2022 — that deal collapsed after pressure from regulators.
The deal is much more stunning considering that cloud security startup Wiz just closed the largest cybersecurity funding round of the 12 months in May, when it raised $1 billion at a $12 billion valuation. The round was co-led by Andreessen Horowitz, Venture Lightspeed Partners AND Develop capital.
The Google deal would double Wiz’s valuation from just two months ago.
Wiz said its annual recurring revenue for 2023 was $350 million.
Google wants a larger piece of the cloud pie
The deal seems to signal that Google is bored with being in third place when it comes to cloud services — for AWS AND Microsoft‘S BlueWiz’s software helps businesses secure cloud apps, which implies Google can increase its security revenue.
It would not be Google’s first major cybersecurity acquisition. The tech giant bought Mandate for $5.4 billion in 2022.
Exits
The cyber M&A market has shown some signs of recovery over the past six months — although investors were likely expecting more this 12 months.
So far this 12 months, 45 VC-backed cybersecurity startups have been acquired, according to Crunchbase data — significantly exceeding the total of 66 startups acquired in all of last 12 months.
On the other hand, the potential Google deal comes at a time when the IPO process still appears to be somewhat frozen — though perhaps thawing. Investors have often pointed to Wiz as a company that might go public every time it wanted, and would likely wait for the most opportune moment.
After Wiz raised $1 billion in funding in the spring, the co-founder and CEO Asaf Rappaport He spoke openly about the company’s ambitions to one day go public.
However, $23 billion could change many plans.