An Israeli startup prevented the most expensive deal in Google’s history. What happened?

The agreement between Google and Wiz was estimated at $23 billion — and it was to become the most expensive in the history of the search giant.

According to The VergeIsraeli cyber startup Wiz rejected the offer of its parent company Google in favor of an initial public offering.

Wiz was founded in Israel in 2020 (now headquartered in New York) and has grown rapidly under the leadership of CEO Assaf Rappaport. The company generated about $350 million in revenue in 2023, works with 40% of Fortune 100 companies, and in May raised $1 billion in funding at a $12 billion valuation (however, if the deal went through, it could have doubled the value).

According to Rappaport’s letter, Wiz will focus on reaching $1 billion in annual recurring revenue with the IPO, a goal the cybersecurity firm set itself before negotiating with Google. Neither Wiz nor Alphabet has officially acknowledged that a deal is under discussion.

Wiz offers cloud-based security solutions for enterprise customers and, if acquired, could put Google in a better position to compete with industry leaders Microsoft and Amazon. At the same time, the search giant faces unprecedented levels of antitrust scrutiny, which could potentially hinder the deal: The Department of Justice has twice sued the company and anti-competitive practices were discussed last year at the meeting.

In 2022, Google has already acquired two cybersecurity firms — Siemplify and Mandiant — for $500 million and $5.4 billion, respectively, with the latter company notable for disclosing large-scale hacking of SolarWinds.