Cybersecurity Startup Wiz Chooses IPO Over Google's $23 Billion Acquisition Offer

Wiz, a cybersecurity startup, has declined a $23 billion acquisition offer from Google parent Alphabet, opting for an initial public offering instead. CEO Assaf Rappaport conveyed the decision in a memo, emphasizing the focus on achieving $1 billion in annual revenue. This move underscores the company's future growth plans and its impact on the tech sector.

Wiz has turned down a $23 billion acquisition proposal from Google parent Alphabet, according to a company memo seen by CNBC. The cybersecurity startup will instead pursue an initial public offering (IPO), aiming for $1 billion in annual recurring revenue.

This decision ends what could have been Google's most expensive acquisition in its history. In a Monday memo to Wiz employees, CEO Assaf Rappaport acknowledged that declining such offers is challenging but affirmed the company's commitment to its future milestones.

Heightened anticipation for a deal emerged last week, fueled by reports from various outlets citing unnamed sources in advanced talks. However, neither Wiz nor Google confirmed the negotiations publicly. CNN noted that Rappaport's memo only referred obliquely to the acquisition rumors.

The acquisition would've bolstered Alphabet's standing in the competitive cloud computing market, minimizing potential regulatory scrutiny. As it stands, Google's primary business sectors — internet search and digital advertising — are already under antitrust investigation by the U.S. Justice Department.

Analysts at Wedbush predict that this decision could ripple through the sector, accelerating Google's cybersecurity initiatives and prompting more consolidation as tech giants seek to enhance their platforms. Founded four years ago, Wiz provides security tools for remote data centers and recently raised $1 billion from investors, valuing the company at $12 billion.

(With inputs from agencies.)