Google wants to take over start-up Wiz – this is what’s behind the deal

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Wiz – what kind of company is that?

The cybersecurity company was founded just four years ago and has grown rapidly since then. Wiz offers cloud-based cybersecurity solutions that can be used to counter threats in real time using artificial intelligence. The company’s partners include cloud providers such as Microsoft, Amazon and Google. According to Wiz’s own statement, 40 percent of Fortune 100 companies are the company’s customers. In Germany, companies such as BMW, Siemens and Otto rely on the services of the American-Israeli start-up.

Who is behind Wiz?

Four former Israeli army officers founded the company. According to the Wall Street Journal, CEO Assaf Rappaport and his co-founders Ami Luttwak, Yinon Costica and Roy Reznik each own a good nine percent of the company. They met in the Israeli Defense Forces’ “Unit 8200”, which is responsible for cyber intelligence and has already produced several company founders. The cybersecurity company Palo Alto Networks was also founded by former members of the unit.

Rappaport and Co. already gained experience in founding companies with their first cybersecurity start-up, Adallom, which they founded in 2012 and sold to Microsoft three years later for $320 million. They then worked for Microsoft’s cloud division Azure for a few years before launching Wiz in 2020. The goal here was also rapid growth and a quick exit. The first has already been achieved: Wiz is one of the fastest-growing start-ups in the world. And if the exit is also successful, the founders’ coffers will also be filled.

Why does Alphabet want to take over the start-up?

Google’s parent company has not made a major acquisition for a long time. The last spectacular acquisition dates back to 2012, when the search engine company acquired Motorola’s smartphone division for $12.5 billion. With its current plans, Alphabet wants to gain ground in the cloud business. Google is only number three here, by a long way behind Amazon and Microsoft.

With Wiz’s security solutions, Google could move closer to Microsoft in particular. In the summer of 2023, the software giant’s cloud division fell victim to hackers – presumably from China – who had gained access to the data of various government agencies. The investigation by the US cybersecurity agency CISA ended with a catastrophic verdict for Microsoft, which did not even notice the hacker attack itself. The company should focus on security in its cloud service, is the recommendation.

In view of the global situation increasingly characterized by geopolitical threats, data security is becoming an important feature for companies, organizations and authorities that rely on cloud services. With Wiz, Google would have an important selling point in this regard. It would also be a step for the search engine company to become less dependent on revenue from advertising on the Internet.

What price is being discussed for Wiz?

According to the Wall Street Journal, the price for Wiz is said to be $23 billion. The proposed transaction is said to be largely in cash and could be completed soon, writes the Reuters news agency, citing an insider. The company raised $1 billion in a financing round in May. Wiz was valued at $12 billion in total. Google is therefore offering almost twice as much for the start-up.

Why could the takeover fail?

The talks are at an advanced stage, report the Wall Street Journal and Reuters. But of course they can still fail. But even if they are concluded, there is still an obstacle to overcome. The US government under President Joe Biden has taken tougher action against the Internet company than its predecessors. An antitrust case against Google began last year: The US Department of Justice accuses the company of abusing its dominant market position in Internet advertising. The company is also repeatedly the subject of antitrust investigations in Europe.

It remains to be seen whether the wind will change in the Internet giant’s favor. If Donald Trump wins the election in November, the cards could be reshuffled. The Republican is considered to be more business-friendly.