Alphabet, Google's parent company, is potentially on the verge of its largest acquisition. A source close to the matter indicates that Alphabet is nearing a deal to purchase the cybersecurity startup Wiz for approximately $23 billion.
This acquisition would significantly surpass Google's previous record purchase of Motorola, which it later sold at a loss. Read this article to understand what is behind the purchase and what comes next!
The Potential Deal With Wiz
Google is one step from buying Wiz for about $23 billion. The value is significant as the previous largest acquisition was when the tech giant bought Motorola for $12.5 billion. Wiz's Latest Valuation was at approximately $12 billion, but the potential of doubling in value is huga.
The Startup's Background
Wiz, a trailblazer in cloud cybersecurity software, raised $1 billion from venture capitalists earlier this year, attracting Google's attention. Despite the buzz, the final terms are not yet finalized, and the deal could still fall through.
The Wall Street Journal first reported the potential acquisition, but both Google and Wiz have declined to comment. Dan Ives, from Wedbush, notes that this move would be a bold statement to competitors, emphasizing Google's commitment to enhancing cloud security.
Google's Historical And Strategic Moves
Google's most recent major acquisition was Mandiant, which it bought for $5.4 billion in March 2022 with the same objective of enhancing cloud security offerings.
This kind of acquisition reflects Google cloud's struggle in competing with Microsoft and Amazon. The company aims for revenue diversification away from search ads and to strengthen its position in the cybersecurity market.
However, the acquisition has its challenges, particularly in the regulatory environment. The Biden administration has been rigorously scrutinizing large tech deals under antitrust laws, though the level of scrutiny could change if there is a shift in political leadership.
Impact On Wiz
For Wiz, the acquisition by Alphabet would represent a significant milestone. Founded by Assaf Rappaport, Ami Luttwak, Yinon Costica, and Roy Reznik in March 2020, Wiz has experienced rapid growth, now serving 40% of Fortune 100 companies and collaborating with major cloud providers like Amazon, Microsoft, and Google.
While the final terms are yet to be settled, and regulatory scrutiny looms, the acquisition could significantly enhance Google's competitive edge in the cybersecurity market. For Wiz, the deal represents a milestone, validating its rapid growth and impact in the industry.
