Wiz, a cloud security company, was reported earlier this month to be in acquisition talks with Google. Under the deal, Google would have paid $23 billion but Wiz has rejected the offer and will now pursue an initial public offering (IPO) as it originally planned.
The deal was reported to The Wall Street Journal a few weeks ago by anonymous sources. Had the deal gone through, it would have been Google"s biggest acquisition, surpassing its $12.5 billion deal to buy Motorola Mobility.
Assaf Rappaport, Wiz"s co-founder, told employees in a memo "Saying no to such humbling offers is tough." However, the company was said to be concerned about antitrust and investor concerns (antitrust investigations have been coming up a lot lately) and decided to give up on the deal.
With a deal off the table, Wiz now wants to go back to its previous goals of doing an initial public offering to raise more capital (and giving the public a chance to buy its shares) and achieving $1 billion in annual recurring revenue.
Based on its most recent round of funding, Wiz has a valuation of $12 billion. Since its founding in 2020, it saw $100 million in annual recurring revenue after 18 months and then reached $350 million last year.
The company offers cloud security products that include prevention, active detection, and response. Google was interested in these tools as it would have meant it could better compete with Microsoft.
Regulators in both the US and EU have been getting more concerned with acquisitions by big tech in recent years, the most famous case was Microsoft"s acquisition of Blizzard which did go through but after much scrutiny.
Regulators are concerned about the implications on competition, if big tech keeps on buying up new startups, consumers will have fewer choices and they could experience higher prices.
Source: CNBC