US-Israeli cloud security startup Wiz is mulling a potential bid for Israeli-founded cybersecurity firm SentinelOne, which has a market cap of almost $5 billion.
In response to reports over the weekend over a potential deal, a Wiz spokesperson said that the company has “openly discussed the possibility of acquisition.”
“We consistently evaluate potential opportunities that will support our business growth and help us maintain our market leadership position,” the spokesperson said. “SentinelOne has a strong cybersecurity offering, and we have been following their growth journey for the past several years.”
Discussions for a potential bid are understood be at a very preliminary stage. Listed on the New York Stock Exchange, SentinelOne, which has a market cap of more than $4.8 billion, has been weighing strategic options that could include a sale and has hired investment bank Qatalyst Partners to advise on talks with potential acquirers, including private equity firms, Reuters |reported last week.
The company’s stock, which started trading at $35 per share in 2021, lost more than 40% of its value over the past year, and is currently trading around $16.
Established in 2013, SentinelOne develops AI-based software that protects laptops and cellphones from security breaches by identifying unusual behavior in enterprise networks. The Mountain View, California-based company was founded by Israeli entrepreneurs Tomer Weingarten, its CEO, and Almog Cohen. Meanwhile, Wiz’s agent-less technology provides security coverage of a company’s entire cloud environment “in minutes” for rapid risk reduction, according to the company.
Wiz was co-founded in early 2020 by Assaf Rappaport, Yinon Costica, Ami Luttwak, and Roy Reznik, the same team that founded the firm Adallom (sold to Microsoft for $320 million in 2015) and led Microsoft Azure’s Cloud Security Group. Almost three years later, the US-Israeli cybersecurity startup was most recently valued at a staggering $10 billion after raising $300 million in its latest private funding round earlier this year.
The company was established 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 the cloud. Headquartered in New York, Wiz employs 650 people, 150 of whom work in Israel.
To date, Wiz has raised $900 million from investors, including Sequoia Capital, Insight Partners, Blackstone and G Squared, and is also backed by private investors and entrepreneurs such as Bernard Arnault and Starbucks founder Howard Schultz.
In March this year, Wiz and SentinelOne joined forces and announced an exclusive and strategic partnership seeking to offer businesses and organizations end-to-end cloud security solutions to protect their digital workloads and infrastructure.
“By utilizing the market-leading solutions offered by SentinelOne and Wiz, customers can gain complete visibility into their infrastructure hosted in the cloud, quickly identify and remediate attack paths to critical resources, and prevent threats with comprehensive runtime protection of their cloud workloads,” the two cybersecurity firms said.
The report about a potential deal adds to a flurry of Israeli-founded cybersecurity startups being snapped up by tech companies in recent months as they look to meet the fast-growing security needs of businesses but are facing a global tech funding crunch.
Earlier this month, cybersecurity firm Check Point Software Technologies Ltd. announced that it is acquiring Israeli-founded startup Perimeter 81 for about $490 million in a cash-free, debt-free deal, to bolster its security tools for remote and hybrid workers. Also in August, US cybersecurity company Rubrik said it is buying Israel-based startup Laminar, a data security platform provider that helps businesses and organizations monitor and protect sensitive data stored in public clouds.
In March, Cisco Systems, a US maker of networking software and hardware, said it intends to snap up Israel’s Lightspin Technologies, a developer of cloud security software. Other deals include US tech giant IBM buying Israeli cyber startup Polar Security, a developer of an automated data security platform to track and protect sensitive data across hybrid cloud-based systems, and US-based cybersecurity firm Palo Alto Networks acquiring Cider Security.