Wiz Rejects Google’s $23 Billion Deal

Wiz, the $12 billion cloud security startup, has rejected a $23 billion acquisition offer from Google parent Alphabet. Fortune viewed an internal note that communicated the decision to the company’s 1,200 employees.

“While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” wrote CEO Assaf Rappaport. He further outlined the company’s ambitious goals, including reaching $1 billion in annual recurring revenue and eventually going public.

Investors Back Wiz’s Decision

A source familiar with the matter confirmed to Fortune that Wiz’s investors fully support the decision to remain independent.

The source explained that the decision was based on a straightforward calculation: Wiz is already substantial enough to aim for an IPO, which remains the company’s ultimate goal.

Expected regulatory scrutiny of the deal, which would have been the largest acquisition in Google’s history, may also have influenced Wiz’s decision to go alone.

“The market validation we have experienced following this news only reinforces our goal – creating a platform that both security and development teams love,” Rappaport wrote in his note to employees.

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Aiming for IPO and Continued Growth

Speaking at the Fortune Brainstorm Tech conference last week, Rappaport highlighted the ripeness of the cybersecurity industry for consolidation. However, he emphasized that IPOs and acquisitions are merely “milestones” in a longer journey.

“That’s kind of the mindset that we always have, being private, being public, and a startup,” he said.

The four-year-old startup, with offices in New York and Tel Aviv, Israel, raised $1 billion in venture funding earlier this year at a valuation of $12 billion. At that time, the company indicated plans to use the capital for growth and acquisitions.

In December, Wiz made its first-ever acquisition of developer-focused cloud platform Rafft. As Fortune exclusively reported, it followed up in April with the acquisition of Gem Security for $350 million.

Wiz’s decision to remain independent is backed by a roster of high-profile investors, including Andreessen Horowitz, Lightspeed Venture Partners, Thrive Capital, Index Ventures, Cyberstarts, Advent International, Greylock, Greenoaks, Salesforce Ventures, Sequoia Capital, and Wellington Management.

Rappaport’s vision for Wiz is clear: to build the best cybersecurity company in the world. “We are grateful for the faith our employees, investors, and customers have in us,” he wrote.

As Wiz continues to forge its path independently, the company remains focused on innovation and growth, setting its sights on an IPO and further acquisitions shortly.

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