Google parent Alphabet is reported to be in the final stages of discussions to buy cybersecurity company Wiz for a sum near $23 billion, an individual familiar with the matter shared with The Wall Street Journal. This move would eclipse Google's previous record acquisition. Yet, amidst intense antitrust scrutiny of tech conglomerates, an acquisition of this magnitude could reshape perceptions of Google's strategic direction, particularly in the competitive cloud computing sector, which grew 26% just last year.
Wiz, a startup that emerged in 2020 with Assaf Rappaport at the helm, has advanced rapidly in the cybersecurity arena, achieving a substantial $350 million in annual recurring revenue in 2023, according to The Wall Street Journal. The company has already attained an enviable investor base, with the likes of Sequoia Capital, and Andreessen Horowitz among its backers, heightening its allure for potential suitors like Google. It represents a strategic pivot for the tech titan, closely following its acquisition of another cybersecurity firm, Mandiant, for $5.4 billion just two years ago, as reported by CNBC.
To contextualize this transaction within Google's history of acquisitions, the company has executed several billion-dollar deals over the years, such as the $12.5 billion Motorola Mobility purchase in 2012 and the acquisitions of Nest Labs and Fitbit, as detailed in an infographic produced by CB Insights. This prospective Wiz acquisition, if completed, would steer Google's investment chronicle into a novel chapter, one that reflects an evolving and advanced cybersecurity horizon.
While the deal is not yet finalized and could still fall apart, its successful conclusion could signal Google's ambitious response to a largely dormant initial public offering market, positioning itself as an aggressive player in the cloud-computing realm, an area where it lags behind Amazon and Microsoft, as noted by The Wall Street Journal. A deal of this kind would underscore Google's determined focus on cybersecurity, bearing witness to an increasing corporate shift to protect vast digital infrastructure against sophisticated nation-state and criminal cyber actors.
For Alphabet, embarking on a transaction as significant as this, in the course of a year when most startups grapple with the residual effects of a high valuation tech bubble, seems to reflect confidence, and a distinct appetite for growth despite potential antitrust pushbacks. The company's endeavors into M&A continue, indicative of its ravenous pursuit of new avenues to fortify its technological foothold. Splunk's recent $28 billion takeover by Cisco, elucidates the sharp industry focus on cybersecurity and analytics as conveyed by The Wall Street Journal.
