Wiz: Cybersecurity firm rejects Google’s $23 billion takeover offer

Israeli cybersecurity company Wiz has rejected a $23bn (£17.8bn) takeover offer from Google parent Alphabet, in what would have been its largest ever acquisition.

In an internal memo to staff seen by the BBC, Wiz founder and CEO Asaf Rapaport said he was “flattered” by the offer.

He said the company would instead seek to reach $1bn (£775m) in revenue before selling shares to the public.

A source close to the deal told the BBC the offer was “very attractive”, but Waze believed it was big enough to go it alone and try to become the world’s largest cybersecurity company.

Earlier this year, the company reported annual recurring revenue of $500m (£387m).

Wiz and Alphabet have been contacted for comment.

“I know the past week has been intense, with the buzz around the potential acquisition,” Mr. Rapaport said in the memo to employees.

“While we are pleased with the offers we have received, we have chosen to continue on our path to building Wiz.”

In rejecting Google’s offer, Wiz will seek an initial public offering (IPO) – a major move that would see the company debut on a stock exchange.

Waze is the third venture launched by Mr. Rappaport and his three founders, Amy Luttwak, Roy Reznik and Ynon Kostic, who first met while serving in the Israeli military.

The group worked together in the country’s equivalent of Britain’s GCHQ or America’s NSA.

Many of the world’s largest Israeli cybersecurity companies were founded by people who served in this department, including Check Point, Palo Alto, and Armis.

In 2012, the founders started a cybersecurity company called Adallom, which was bought by Microsoft for $320m (£248m) three years later.

The founders took their team to the tech giant as part of the deal, where they worked on security products.

They left Microsoft and launched Wiz in March 2020.

Commentators have credited the work of the Microsoft founders with creating such excitement at Alphabet about a potential purchase of Wiz.

Last May, it was valued at $12bn (£9.3bn) during a $1bn (£775m) fundraising campaign.

“This is the mindset we need in Europe,” Neil Shah, head of technology at the London Stock Exchange, said in a LinkedIn post.

The Wiz founders are walking away from the $1 billion and putting it back on the roulette table in hopes of a more rewarding outcome in the long run.

“They saw where the value went last time they sold. Good luck to them.”

Wiz has bases in New York, Tel Aviv and three other locations in the United States, according to its website.