Israeli cybersecurity startup Wiz has ended negotiations with Google parent Alphabet (GOOGL.O) regarding a reported $23 billion deal that would have marked the U.S. tech giant’s largest-ever acquisition, according to a memo from Wiz seen by Reuters.
Wiz CEO Assaf Rappaport announced that the company would now focus on its planned initial public offering, aiming to reach an annual recurring revenue of $1 billion. “Turning down such substantial offers is challenging, but with our exceptional team, I am confident in this decision,” Rappaport stated in the memo, referring to the acquisition proposal.
Neither Alphabet nor Wiz have officially confirmed the deal discussions. The Wiz memo did not mention Google or Alphabet by name. Google did not immediately respond to a request for comment from Reuters, while Wiz declined to comment.
Earlier this month, Reuters reported that Alphabet was in advanced talks to acquire Wiz for approximately $23 billion, based on information from a source familiar with the matter. This valuation was nearly double Wiz’s $12 billion valuation from May, when it raised $1 billion in a private funding round.
Wiz specializes in cloud-based cybersecurity solutions that help companies identify and mitigate critical risks on cloud platforms, utilizing artificial intelligence.
Wiz’s decision to terminate the deal is a setback for Google, which has been heavily investing in its cloud infrastructure and seeking to attract more clients to its cloud business, which generated over $33 billion in revenue last year.
This development is the second recent blow for Alphabet in the M&A space, following reports of its decision to abandon a deal with online marketing software company HubSpot (HUBS.N).
Wiz would have been Alphabet’s second significant acquisition in the cybersecurity sector, following its $5.4 billion purchase of Mandiant in 2022.
