After a breakdown in talks eight months ago, Alphabet, the parent company of Google, is anticipated to reveal its purchase of Israeli cybersecurity powerhouse Wiz within hours. The deal is estimated at around $33 billion, surpassing the $23 billion initially discussed in their previous negotiations.
This deal will mark the largest acquisition in history of an Israeli company and Alphabet’s biggest to date. The previous record for an Israeli company’s exit was Intel’s $15 billion purchase of Mobileye in 2017. Alphabet’s previous largest acquisition was Motorola Mobility in 2011, which cost $12.5 billion.
The all-cash deal is still awaiting regulatory approval. Once completed, the four founders of Wiz—CEO Assaf Rappaport, Chief Product Officer Yinon Costica, Chief Technology Officer Ami Luttwak, and Chief R&D Officer Roy Reznik—are expected to earn between $2 billion and $3 billion. Additionally, Wiz’s 1,800 employees are expected to receive substantial benefits from the acquisition, including “sale and retention” bonuses, which are reportedly among the highest in Israel’s history. Senior employees could receive millions in payouts, while junior employees may get hundreds of thousands of dollars.
Wiz is regarded as one of Israel’s most valuable and secure tech companies. Just last week, the company hosted a lavish Purim celebration featuring Israel’s top entertainers, with an estimated budget of 15 million shekels. Sources familiar with the company suggest that the deal with Google will not result in layoffs. Instead, Wiz plans to ramp up hiring, with about 100 open positions at the moment.
What changed since the summer?Under the terms of the agreement, Wiz will continue to operate as an independent division within Alphabet, much like LinkedIn does under Microsoft. The company will retain its headquarters in Israel, and CEO Assaf Rappaport has committed to staying in his position for at least the next three years. Wiz will also continue to collaborate with Google’s competitors in the cloud space.
So, what has led to the change since July 2023, when Wiz rejected Alphabet’s earlier $23 billion offer, with the company aiming to become a $100 billion public entity? At that time, Rappaport made it clear that his vision was to build a major, publicly listed cybersecurity company capable of competing with the largest global players. Wiz even hired its first CFO two months ago, preparing for a potential IPO.
According to sources, there were three key factors that led to Wiz’s change of heart: Alphabet’s new offer, which was $10 billion higher; the shift in leadership in the U.S., creating expectations for quicker regulatory approval; and Wiz’s successful negotiation to retain its operational autonomy under Alphabet. Industry experts also suggest that Wiz’s leadership may have realized that pursuing an IPO in the current market could prove to be overly challenging or risky.
Additionally, the earlier leak about Alphabet’s interest in acquiring Wiz helped raise the company’s profile and boosted investor interest, with major backers such as Andreessen Horowitz and Insight Partners becoming more involved.
For Alphabet, acquiring Wiz strengthens its position in cloud computing and cybersecurity, which are currently dominated by Microsoft and Amazon. Microsoft, the global leader in cybersecurity revenue, operates its primary cybersecurity center in Herzliya, just a few minutes away from Wiz’s headquarters. It’s worth noting that Assaf Rappaport, before founding Wiz, was the CEO of Microsoft Israel.
Reports indicate that Thomas Kurian, the head of Alphabet’s Cloud division, is overseeing the acquisition. Kurian was previously responsible for Alphabet’s acquisition of Israeli cybersecurity startup Siemplify for several hundred million dollars.
Wiz was founded in 2020 by Rappaport, Costica, Luttwak, and Reznik, the same team behind Adallom, which was sold to Microsoft. Wiz offers cloud security solutions for organizations and rapidly became a leader in the market. The company has raised $1.8 billion to date and announced last year that it had surpassed $500 million in annual recurring revenue. Its flagship product, CSPM (Cloud Security Posture Management), focuses on identifying vulnerabilities in cloud environments, servers, and other critical systems.
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