Google Reportedly in Advanced Talks to Acquire Cybersecurity Startup Wiz for $23 Billion

In a potential blockbuster deal, TechCrunch has learned from a source close to the situation that Google’s parent company Alphabet is reportedly in deep negotiations to acquire the fast-growing cybersecurity company Wiz for $23 billion. The talks were initiated a few weeks ago when Thomas Kurian, head of Google Cloud, approached Wiz to express interest in an acquisition.

Since then, both parties have engaged in swift discussions and tentatively agreed on the hefty price tag. However, my source noted that deals of this magnitude face considerable complexities that would need to be resolved, with around a 50% chance the negotiations could fall through over the next week to 10 days as important details are ironed out.

Founded just four years ago in 2020, Wiz has disrupted the cybersecurity space with its innovative solutions and astronomical growth. The startup achieved annual recurring revenue (ARR) of $100 million within 18 months of launching. By this past May, Wiz’s ARR had ballooned to around $350 million, demonstrating the strong demand for its offerings among customers. According to the source, Wiz’s ARR has now raced past the $500 million mark and is on track to hit $1 billion in ARR next year.

If finalized, the proposed $23 billion valuation would represent a mammoth 46x multiple of Wiz’s current run rate. In comparison, its chief rival Palo Alto Networks trades at a far lower 14x revenue. Google appears intent on opening its checkbook wide to outbid any other suitors for Wiz, showing Silicon Valley heavyweights are taking notice of its ascendance.

For readers, the potential merger signifies both companies’ strategic priorities around bolstering cloud security capabilities. It will be intriguing to observe if negotiations are successfully culminated in the days ahead or alternatives emerge. Stay tuned for further updates.