Cyber-security firm rejects $23bn Google takeover

Israeli cyber-security firm Wiz has rejected a $23bn (£17.8bn) takeover offer from Google parent company Alphabet, in what would have been its largest-ever acquisition.

In an internal memo to staff seen by the BBC, Wiz founder and chief executive Assaf Rappaport said he was "flattered" by the offer.

He said the company would instead seek to reach $1bn (£775m) in revenue before selling shares to the public.

A source close to the deal told the BBC the offer was "very tempting", but Wiz believed it was big enough to go it alone and attempt to become the biggest cyber-security company in the world.

Earlier this year, the firm reported an annual recurring revenue of $500m (£387m).

And it claimed itself to be the fastest-growing software company in history, external in 2022, when it reached $100m (£74m) in annual revenue in its first 18 months.

Wiz and Alphabet have been approached for comment.

“I know the last week has been intense, with the buzz around a potential acquisition," said Mr Rappaport in the memo sent to staff.

“While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz.”

In turning down Google's offer, Wiz will look to make an initial public offering (IPO) - a major step which would see the firm debut on a stock exchange.

Wiz is the third venture by Mr Rappaport and his three co-founders Ami Luttwak, Roy Reznik and Yinon Costic, who first met while serving in the Israeli military.

The group worked together in the country's equivalent of the UK's GCHQ or the US National Security Agency.

Many of the biggest Israeli cyber-security companies in the world have been created by people who served in this division, including Check Point, Palo Alto and Armis.

In 2012 the founders started a cyber-security company called Adallom, which was bought by Microsoft for $320m (£248m) three years later.

The founders took their team to the tech giant as part of the deal, where they worked on security products.

They left Microsoft and launched Wiz in March 2020.

Commentators have attributed the founders' work at Microsoft for creating such excitement at Alphabet about a potential purchase of Wiz.

In May, it was valued at $12bn (£9.3bn) during a $1bn (£775m) fundraising campaign.

“This is the mindset we need in Europe," said London Stock Exchange head of tech Neil Shah in a post on LinkedIn.

"The founders of Wiz walk away from a billion $ payday and have put it back on the roulette table in the hope of a more rewarding outcome in the long term.

“They saw where the value went last time when they sold. Good luck to them.”

Wiz has bases in New York, Tel Aviv and three other US locations according to its website.