One source told CNBC that antitrust and investor concerns also contributed to Wiz’s decision to walk away from the massive deal.
Cybersecurity start-up Wiz has reportedly backed out of a deal to be acquired by Google for roughly $23bn.
Reports began circulating earlier this month that the two companies were in advanced talks for an acquisition that would be mainly a cash-funded deal. The acquisition would have given Google an edge in the cybersecurity market – Wiz claims that 40pc of Fortune 100 companies are its customers.
But in a memo seen by CNBC and TechCrunch, Wiz co-founder and CEO Assaf Rappaport told staff that “saying no to such humbling offers is tough” and that the start-up would focus on its own goals of an initial-public offering and reaching $1bn in annual revenue.
“With our exceptional team, I feel confident in making that choice,” Rappaport said in the memo. “The market validation we have experienced following this news only reinforces our goal – creating a platform that both security and development teams love.
“We are grateful for the faith our employees, investors, and customers have in us as we build the best cybersecurity company in the world.”
Wiz is an Israeli-founded company that provides cloud cybersecurity services for its customers. The New York-headquartered start-up was founded in 2020 and has grown rapidly in notoriety since then, being listed in 15th place on the 2023 Forbes Cloud 100 list. It’s investors include Blackstone, Sequoia, Salesforce Ventures and Lightspeed.
Meanwhile, one source told CNBC that antitrust and investor concerns also contributed to Wiz’s decision to walk away from the deal.
Both the US and EU have been taking a greater focus on competition risks from large acquisitions. Adobe decided to end its $20bn merger plans with Figma last year due to a series of regulatory roadblocks hindering the deal.
Google is currently under threat from a massive antitrust investigation in the US, as the country’s Department of Justice claims Google has actively worked to maintain a monopoly when it comes to search engines and online advertising.
The judge for this case heard the final arguments from both the department and Google in May and is expected to take several months to reach a final decision, AP reported.
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