Cybersecurity start-up Wiz Inc has turned down a takeover bid of as much as US$23 billion from Alphabet Inc, sticking instead with a plan for an initial public offering (IPO).
The New York-based start-up connects to cloud storage providers such as Amazon Web Services and Microsoft Azure, and scans data stored there for security risks.
The rejection would come as a blow to Alphabet, which is trying to catch up with Microsoft Corp and Amazon.com Inc in an intensely competitive cloud services market.
Photo: Bloomberg
Alphabet, which bought cybersecurity firm Mandiant for US$5.4 billion two years ago in its second-largest acquisition, could have used Wiz to round out its security offerings.
“Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice,” Wiz CEO Assaf Rappaport said in a memo to employees.
“Let me cut to the chase,” Rappaport said.
The company’s next milestones are reaching US$1 billion in annual recurring revenue and an IPO, he said.
Google has sought to build up its capabilities in cybersecurity as a key prong of its strategy to gain share in cloud computing. It still trails Amazon and Microsoft in that market, but the search giant has been gaining ground, and its cybersecurity unit reported a profit for the first time last year.
Before the takeover talks two months ago, Wiz had been rapidly expanding with acquisitions of its own, and was starting to eye an IPO.
“The market validation we have experienced following this news only reinforces our goal — creating a platform that both security and development teams love,” Rappaport said in the memo.
The company, founded in 2020, was valued at US$12 billion during a May funding round that drew investors such as Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital.
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