Wiz raises $300m at $10b valuation, says funds will stay in US amid judicial shakeup

US-Israeli cybersecurity CEO says he is worried not only about tech capital being pulled out of Israel but that funds will no longer enter due to uncertainty regarding legislation

Sharon Wrobel is a tech reporter for The Times of Israel.

Wiz's offices in Tel Aviv. (Courtesy)
Wiz's offices in Tel Aviv. (Courtesy)

Almost three years after it was founded, US-Israeli cybersecurity startup Wiz is being valued at a staggering $10 billion after raising $300 million in its latest private funding round, the company announced on Monday, adding that the money will not be invested in Israel given the uncertainty around the country’s judiciary system .

“Unfortunately, in light of the planned judicial changes, the money we raised will not enter Israel,” Wiz co-founder and CEO Assaf Rappaport, who is one of the vocal leaders in the protests against the government’s judicial overhaul plans, told The Times of Israel. “Given the uncertainty about the independence of institutions in Israel and following an acute risk assessment of the situation we will keep funds in US banks while continuing our operations in Israel.”

Wiz employs 650 people, 150 of whom work in Israel. The latest investment round was led by Lightspeed Venture Partners and existing investors Greenoaks Capital Partners and Index Ventures.

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.

“Wiz is now the world’s largest cybersecurity unicorn and fastest SaaS company to achieve a $10 billion valuation,” the company said in a statement.

Rappaport has spoken out against the planned judicial changes in recent weeks, warning of their potential economic impact and saying that investors have pressured its management to take precautions amid uncertainty over the weakening of the legal system. Rappaport is joining a number of senior executives from Israel’s business and tech community who are taking steps to withdraw funds from Israel to diversify risk.

Wiz co-founder and CEO Assaf Rappaport. (Courtesy)

“Our greatest concern regarding Israeli high-tech is not only the money that is leaving Israel, but also the large amount of money that will no longer enter Israel,” said Rappaport. “I hear from everywhere, the voices of worried investors, of entrepreneurs who are secretly pulling money out of the country and from workers who fear for their future in Israel.”

The judicial overhaul advanced by Justice Minister Yariv Levin would severely limit the High Court’s ability to strike down laws and allow the Knesset to re-enact legislation that the court has struck down. It would also give Prime Minister Netanyahu’s coalition government control over judges’ appointments and allow ministers to appoint their own legal advisers.

The government’s plan to upend the judiciary has been weighing on market sentiment amid fears over its negative impact on the country’s sovereign credit rating, which could spur an outflow of capital and scare away investors.

“Wiz has been successful until today thanks to an amazing ecosystem that exists in Israel, but it is currently facing existential danger,” said Rappaport. “I believe and hope that the voices of pain coming from all parts of the people will move the government to focus on security incidents, stop the legislative actions and strive for a real compromise that is acceptable to all parties.”

Wiz was founded in early 2020 by 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.

Headquartered in New York, Wiz said that the current late-stage funding round will be used to boost the growth of its global operations, in particular in the US. Specifically, the company plans to expand its workforce in the US and globally, and open three new offices in Austin, Dallas and Washington, DC.

“Despite the downturn what we are seeing is that companies are still investing in securing their operations from cyberattacks,” Rappaport said. “Demand for Wiz’s security platform is high, in particular in the US, so we want to build a bigger platform and attract more talent at our three new sites in the US.”

Wiz’s agent-less technology provides security coverage of a company’s entire cloud environment “in minutes” for rapid risk reduction, the company said. It now counts over 35% of the Fortune 500 as customers, it added.

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.

Most Popular
read more: