Memo to staff from co-founder explains reason for walking away from Google’s takeover bid, and confirms IPO intentions

Cyber security startup Wiz has reportedly refused a multi billion dollar takeover offer from Alphabet’s Google, in favour of a public listing.

CNBC reported that it had obtained a memo to Wiz staff from co-founder Assaf Rappaport, in which he explained the decision to walk away from the “humbling” $23 billion approach from Google.

Google’s approach to Wiz has been mooted by various media outlets for weeks now, and if it had gone ahead, it would have been Google’s largest-ever acquisition.

Wiz rejection

It should be remembered that Google’s biggest acquisitions to date had been the $12.5 billion purchase of Motorola Mobility in 2012, made mostly because Motorola’s patents were important for the Android platform.

Motorola Mobility was Motorola’s handset operation, and had been separated from its business division in December 2010.

However Google ended up selling Motorola to Lenovo for $2.9 billion in January 2014.

Google second most expensive acquisition was the $5.4 billion acquisition of cybersecurity veteran Mandiant in 2022.

But now according to the CNBC report, Google’s $23 billion approach has been rejected by the cybersecurity firm.

“Saying no to such humbling offers is tough,” Wiz co-founder Assaf Rappaport wrote in a staff memo obtained by CNBC. A person familiar with Wiz’s thinking, who requested anonymity to discuss private matters freely, said the company weighed antitrust and investor concerns as reasons for abandoning the potential deal.

Rappaport reportedly wrote that the company would focus on its next milestones: an initial public offering and $1 billion in annual recurring revenue.

Wiz had been eyeing both targets well before talks with Google had been reported.

The deal would have nearly doubled the $12 billion valuation of the startup from its most recent round of funding, CNBC noted.

IPO ambitions

New York-based Wiz was founded in 2020 and has grown rapidly under Rappaport, who had been targeting an IPO as recently as May.

The company hit $100 million in annual recurring revenue after 18 months, and reached $350 million last year, CNBC noted.

Wiz’s cloud security products include prevention, active detection and response, and are geared towards cloud-based operations.

The proposed deal to acquire Wiz sought to bolster Alphabet’s profile in the cloud computing market – a market currently led by Amazon Web Services and Microsoft.

Google didn’t immediately respond to requests for comment, CNBC noted.

HubSpot deal

Wiz was not the only firm on Alphabet’s radar recently.

Earlier this month Alphabet reportedly opted not to pursue a takeover of HubSpot, amid increased regulator scrutiny of tech acquisitions on antitrust grounds.

That takeover came when reports emerged in April 2024 that Alphabet was eyeing a possible acquisition of HubSpot, in order to bolster its own to bolster CRM and cloud position.