In a surprising turn of events, the much-anticipated acquisition of Israeli cybersecurity startup Wiz by tech giant Google has fallen through, sources close to the matter confirmed to CNN on Tuesday. The deal, valued at an estimated $23 billion, would have marked Google's largest acquisition to date and set a new record for Israeli tech exits.
Wiz CEO Assaf Rappaport reportedly informed the company's 1,200 employees via an internal memo that the firm will now pursue an initial public offering (IPO) instead. "Our next goals: $1 billion in revenue and going public," Rappaport wrote, according to portions of the memo obtained by CNN.
The collapse of the deal comes just days after reports of "advanced talks" between the two companies had surfaced, sending ripples through the tech industry. Analysts speculate that the leak of these negotiations, possibly from Google's cloud division, may have played a role in the deal's undoing.
Founded in 2020, Wiz has experienced meteoric growth in the competitive cloud security market. The company reached a $1.7 billion valuation within its first year and reported annual sales of $350 million by the end of 2023. This rapid ascent had made Wiz an attractive target for major tech players looking to bolster their cloud security offerings.
The failed acquisition represents a significant shift in strategy for both companies. For Google, it marks a setback in its efforts to expand its cloud security portfolio. For Wiz, the decision to remain independent and pursue an IPO signals confidence in its growth trajectory and market position.
Industry experts are now watching closely to see how this development will impact the broader cybersecurity landscape and whether it will trigger a wave of IPOs among other high-growth tech startups.
* Kann 11 News contributed to this article.