Google Near Deal To Buy Cybersecurity Startup Wiz For $23 Billion: WSJ

Google-parent Alphabet (GOOGL) is in late-stage talks to buy cybersecurity startup Wiz for about $23 billion, The Wall Street Journal reported Sunday, citing sources. It would be Google’s biggest acquisition ever and speed up its push into cybersecurity.

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A deal for Wiz, founded in 2020, could be finalized soon, the WSJ added. In early May, Wiz had a $1 billion funding round valuing the startup at $12 billion. It hit $350 million in annual recurring revenue in 2023.

Buying Wiz could boost Google’s cloud-computing business, which lags behind Amazon.com (AMZN) unit Amazon Web Services as well as Microsoft (MSFT). Microsoft has substantial cybersecurity tools but its Azure cloud business has been hit by hacking attacks.

A Google-Wiz deal could face significant regulatory review. The U.S. and European Union have intensified antitrust actions vs. Google and other tech titans in recent years.

Earlier Cybersecurity Acquisitions

In addition, Wiz has been a share taker in a fast growing cybersecurity market — Cloud Native Application Protection Platform (CNAPP) products and services. Bank of America forecasts that the CNAPP market will grow from $7.2 billion in 2023 to $16.3 billion in 2027 — a 24% five-year compound annual growth rate.

Further, Wiz conducts comprehensive assessments of customers entire cloud environment and then correlates a vast number of signals to pinpoint the pathways attackers can and may exploit.

In 2022, Google acquired cybersecurity firm Mandiant for $5.4 billion deal. Also, Mandiant is recognized worldwide for its prowess in detecting and responding to state sponsored computer hacking attacks. Mandiant is part of Google’s cloud computing business.

Google in 2022 also bought Siemplify, a threat detection and automated response company, for $500 million.

Google Stock Up 32% In 2024

While Google stock has climbed 32% in 2024, shares fell 2.9% last week. That ended a five-week win streak after hitting a record high on Wednesday. Google earnings for the second quarter are due July 23.

A Google-Wiz deal could buoy other cybersecurity stocks.

Google had previously been tied to takeover talks for marketing software maker HubSpot (HUBS). HUBS stock plunged last week on a report that negotiations had ended. Cambridge, Mass.-based HubSpot sells sales and marketing software to small and midsize businesses.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.