Google's parent company Alphabet plans to acquire cybersecurity unicorns for $23 billion.
On July 14th local time, according to foreign media reports, Alphabet (Nasdaq: GOOGL), the parent company of Google, has started negotiations to acquire Wiz, a cybersecurity startup. The total amount of this transaction may reach up to $23 billion, which is expected to become Google's largest acquisition to date. According to insiders, this deal may be reached soon, but there are still many details that have not been resolved, and negotiations may also fail.
Public information shows that Wiz, an Israeli cloud security company, was founded in 2020 by a former member of Microsoft's cloud security team. It is headquartered in New York and has over 900 employees spread across the United States, Europe, and Asia. Wiz is committed to cloud native security, helping enterprises protect their cloud infrastructure on a large scale, providing the first cloud visibility solution for enterprise security, and has partnered with multiple cloud service providers such as Microsoft and Amazon.
According to Wiz, the company generated approximately $350 million in revenue in 2023. In May of this year, Wiz was valued at $12 billion in its latest round of financing, with investors including well-known institutions such as Andreessen Horowitz, Lightspeed Ventures, and Thrive Capital. There were rumors that Wiz planned to acquire a smaller cybersecurity startup and eventually go public, but in the face of Google's acquisition agreement, Wiz may have changed its plan.
Analysis suggests that Google has been increasing investment in its cloud business, including providing customers with AI (artificial intelligence) tools with stronger generation capabilities. The acquisition of Wiz may help Google catch up with its competitors in the increasingly competitive cloud computing market. As more and more AI related startups move their applications and data to the cloud, opportunities in this field are also growing.
Although Google still lags behind Microsoft and Amazon in this field, the company's first quarter financial report released in April this year, ending on March 31, showed that cloud business revenue increased from $7.454 billion in the same period last year to $9.574 billion, a year-on-year growth of over 28%, returning to the growth rate of the first two quarters of 2023.
In recent years, Google has been relatively conservative in its acquisitions, with only a few large acquisitions. In 2022, Google spent $5.4 billion to acquire cybersecurity company Mandiant. In 2012, it acquired Motorola Mobility Holdings Limited for $12.5 billion.
However, just last week, there were reports that Google had shelved its acquisition of HubSpot, an online marketing software company, perhaps due to the company facing strict scrutiny from antitrust agencies in Europe and America. Therefore, the acquisition of Wiz may also be affected by similar concerns.
Last January, the US Department of Justice filed an antitrust lawsuit against Google for allegedly monopolizing digital advertising technology. In January of this year, the Federal Trade Commission (FTC) issued investigative orders to five companies, including Google's parent company Alphabet, requesting information on recent investments and partnerships between generative AI companies and major cloud service providers. In March of this year, the European Union announced investigations into Alphabet, Apple, and Meta, marking the first time the EU has applied the Digital Markets Act (DMA), an antitrust law that came into effect on March 7th.