Cybersecurity startup Wiz has rejected a $23bn bid to be acquired by Google in what is believed to be a record bid from the tech giant.
CNBC reports that Wiz Co-Founder Assaf Rappaport revealed the Google bid to employees and cited concerns regarding investor belief and antitrust as reasons for backing out of the deal.
Instead, Wiz will now look to pursue its first Initial Public Offering (IPO) which has been in the works for quite some time, as well as pursuing a $1bn annual revenue benchmark.
Cloud security solutions produced by Wiz aim to detect, prevent and respond to various cybersecurity attacks and risks. Its services have even helped Google in the past to help compete with Microsoft’s native security solutions.
The past relationship between the two may have led Google feeling confident in its $23bn bid to acquire the company, as well as it being the most amount of money lodged by the company in an acquisition.
The figure is almost double that of Wiz’s current valuation of $12bn, achieved during a recent funding round. Rappaport did mention in his memo to employees that “saying no to such humbling offers is tough”.
Wiz has gone from strength to strength since being founded in 2020, having raised $100m in its first 18 months of revenue, improving on this again last year by achieving $350m.
There has been a growing demand across the tech sector for improved cloud-based security solutions which was offsetted by COVID-19. Many companies, such as Microsoft and Google, are also looking to build out their cloud infrastructure by incorporating artificial intelligence (AI).
If Wiz would have accepted the Google bid, it would have brought onboard its entire team of specialists to help build out Google Cloud which are continuing to catch up with Microsoft on the development of AI-based models.
Wiz opting to continue with plans for an IPO is indicative of the tech sector’s feelings on a recovering global economy. Whilst funding in fintech, for instance, has declined sharply over the past two years, there is a feeling that investment from venture capitalists will look to open their pockets once again.
Artificial Intelligence funding has been one of the most invested sectors since the start of the year, with the likes of Google, Microsoft and Meta in an AI arms race to provide best-in-service solutions with the technology that is set to take over the next several years.