In biggest exit in Israeli history, Google buys cyber unicorn Wiz for $32 billion
With the acquisition of Wiz, Google’s parent company wants to strengthen its cyber offerings to better compete in the cloud computing race against tech giants Amazon and Microsoft
Sharon Wrobel is a tech reporter for The Times of Israel
Google’s parent company, Alphabet, on Tuesday agreed to buy Israeli-founded cybersecurity unicorn Wiz in an all-cash deal for a staggering $32 billion. The deal, the largest-ever purchase of an Israeli tech company, was hailed across Israel as a sign of the country’s technological prowess and resilience during the challenging war period.
It marks the largest deal of an Israeli-founded company after US giant Intel Corp bought Mobileye, a Jerusalem-based developer of advanced vision and driver assistance systems, for $15.3 billion in 2017. For Google, it is the largest acquisition the search giant has ever made, more than double its record purchase of Motorola Mobility for $12.5 billion in 2012.
“The deal is a significant milestone in the history of Israeli high-tech, especially in light of the renewed fighting this morning [and the ceasefire between Israel and Hamas collapsed],” said Yael Belgrai Cohen, head of the tech division at business analytics firm Dun & Bradstreet Israel. “It is an extraordinary vote of confidence that exemplifies that despite the war, the Israeli industry is still relevant.”
“It will most likely open the door to more [Israeli] companies and lead to more mergers and acquisitions, after we saw fewer and fewer of these during the past war year,” Belgrai Cohen said.
Over the past year, local startups and tech companies struggled to continue to run their businesses grappling with fundraising challenges as they sheltered from rockets, and many of their executives and employees were called up to reserve duty, following the outbreak of war on October 7, 2023, when thousands of terrorists burst into southern Israel from the Gaza Strip, killing some 1,200 people and abducting 251.
Pending regulatory approvals, Wiz will join Google’s Cloud business, but remain independent. The firm, which says that its cyber platform is tailored to secure any application developers build and run in the cloud, employs about 1,800 workers, which will remain in place following the closure of the transaction. Wiz said it expects the deal to close in 2026.
“Wiz and Google Cloud are both fueled by the belief that cloud security needs to be easier, more accessible, more intelligent, and democratized, so more organizations can adopt and use cloud and AI securely,” said Wiz co-founder Assaf Rappaport. “Becoming part of Google Cloud is effectively strapping a rocket to our backs: it will accelerate our rate of innovation faster than what we could achieve as a standalone company.”
Ariel Peleg of the nonprofit Israeli Chamber of Information Technology described the Google-Wiz deal as “excellent news for Israeli high-tech in general and for the defense-tech sector in particular.”
“Wiz has made the most of the market opportunities created by the prevailing sense of uncertainty and leveraged the strong global reputation of Israeli cybersecurity to secure a golden deal,” Peleg said. “This deal is not just about a dream exit but also includes other significant elements, such as maintaining the company’s independence and brand.”
News of advanced talks between the Google parent and Wiz was leaked overnight and came after the Israeli cyber unicorn made headlines in July for walking away from Alphabet’s $23 billion takeover offer. Talks for a deal were called off then partly due to concerns over the clearance of antitrust hurdles by regulatory bodies.
At the time, Rappaport said that Wiz sought to remain an independent cybersecurity unicorn rather than being absorbed by the tech giant. The company set out a growth path to double its annual recurring revenue (ARR) to $1 billion by 2025 and was eyeing plans for an initial public offering (IPO). After its latest private funding round announced in May, in which it raised $1 billion, the company was valued at $12 billion, only four years after its founding.
“Google’s acquisition of Wiz for $32 billion instead of $23 billion as proposed eight months ago highlights the technological value that Israeli companies produce in the global arena,” said Belgrai Cohen.
The cybersecurity unicorn was established in early 2020 just as the COVID-19 pandemic started gaining pace around the world, sending entire enterprises and workers online and spurring a huge migration wave to cloud-based servers.
With hybrid work now standard and digital transformation moving data centers to the cloud, businesses face heightened network security risks, including sophisticated ransomware, malware and other breaches, which in turn bolstered demand for Wiz’s multi-cloud security platform powered by artificial intelligence.
“Enabling more companies to prevent cyber attacks, including in very complex business software environments, will help organizations minimize the cost, disruption and hassle caused by cybersecurity incidents,” said Google Cloud CEO Thomas Kurian.
The acquisition of Wiz gives Google access to its advanced cloud security platform designed to protect modern IT environments. The platform already works across Amazon Web Services (AWS), Microsoft Azure, and Oracle Cloud platforms. The deal, if it goes through, would boost Google’s cloud security offerings to help it compete with tech giants Amazon and Microsoft, and other big cyber firms such as Palo Alto Networks and CrowdStrike.
“Today, businesses and governments that run in the cloud are looking for even stronger security solutions, and greater choice in cloud computing providers,” said Google CEO Sundar Pichai. “Together, Google Cloud and Wiz will turbocharge improved cloud security and the ability to use multiple clouds.”
Wiz was co-founded by Rappaport, Yinon Costica, Ami Luttwak and Roy Reznik, the same team that founded the firm Adallom, which was sold to Microsoft for $320 million in 2015. They also led Microsoft Azure’s Cloud Security Group. Its customers include 40 percent of the Fortune 100 companies, such as Slack, Mars, BMW, DocuSign, Plaid and Agoda.
The Times of Israel Community.