Wiz walks away from $23 billion deal with Google, will pursue IPO

Wiz has walked away from a $23 billion deal to be bought by Google, in what would have been the search giant's largest-ever acquisition, telling employees it would pursue an IPO as previously planned.

"Saying no to such humbling offers is tough," Wiz co-founder Assaf Rappaport wrote in a memo obtained by CNBC to the company's employees. A person familiar with Wiz's thinking, who requested anonymity to discuss private matters freely, said the company weighed antitrust and investor concerns as reasons for abandoning the potential deal.

Rappaport wrote that the company would focus on its next milestones: an initial public offering and $1 billion in annual recurring revenue. Wiz had been eyeing both targets well before talks with Google had been reported.

The deal would have nearly doubled the $12 billion valuation of the startup from its most recent round of funding. Wiz was founded in 2020 and has grown rapidly under Rappaport, who had been targeting an IPO as recently as May. The company hit $100 million in annual recurring revenue after 18 months, and reached $350 million last year.

Wiz's cloud security products include prevention, active detection and response, a portfolio that's appealed to large firms and would have helped Google compete with Microsoft, which also sells security software.

Alphabet's cloud segment has faced increased competition from front-runners Microsoft and Amazon. The cloud unit reached profitability in 2023 after years of hefty investment.

While Google Cloud has seen consistent growth in recent years, the unit, led by CEO Thomas Kurian, is under pressure to continue growing in efforts to capture business during the artificial intelligence boom.

Google didn't immediately respond to requests for comment.

E