Wiz in talks on shareholders selling part of stakes – report

By Investor Empires On Sep 29, 2024

Israeli cybersecurity company Wiz The company is in talks to sell existing shares worth up to $20 billion, according to a report from Bloomberg.

According to the report, the cybersecurity startup, which in July rejected a $23 billion takeover offer from Google, is in negotiations with the aim of offering existing shareholders between $500 million and $700 million of their holdings for sale. The valuation discussed in the talks ranges between $15 billion and $20 billion, according to a Bloomberg source.

The report also quotes a source as saying that the company may raise money for itself directly from investors.

Wiz itself, and the venture capital funds that, according to its sources, will participate in a secondary deal, G Squared, Thrive Capital and Lightspeed Venture Partners, did not respond to the report, Bloomberg says.

As previously reported, Wiz rejected an offer from Google in July, believing it would receive a higher valuation in a future IPO. The company also fears a lengthy regulatory process in the event of a takeover. The Bloomberg report states that Google’s offering valued Wiz at nearly double the $12 billion valuation at which it raised money in its last round in May of this year, when it raised $1 billion.

It aims to achieve annual revenues of $1 billion

Last month, it was reported that Wiz was looking to hire a CFO, which could indicate that it is taking tentative steps towards an IPO. Industry sources said that it will take between one and two years to initiate an initial public offering after the IPO date is set.

In July, the company announced annual recurring revenue of $500 million, and that it was targeting $1 billion, although it’s important to note that this is not an accounting number and actual revenue may be lower. Moreover, according to The Information, Wiz loses more than $100 million annually.

The company grows mainly with investor money, and needs to pump in hundreds of millions of dollars annually to maintain its growth, among other things because it competes with giants like Microsoft, Palo Alto and others. Therefore, in order to replicate the exposure it received from Google in the capital market, Wiz needs to become profitable and grow its revenue significantly.

Founded just four years ago, in 2020, Wiz specializes in cloud security platform development. The company’s technology enables organizations to identify vulnerabilities and unusual activity in their cloud systems, without the need to install software on servers. The company’s four founders — Assaf Rappaport (CEO), Ami Luttwak (CTO), Yinon Kostica (Vice President of Research and Development), and Roy Reznick (CPO) — served together in the IDF’s 8200th Signals Intelligence Unit. During its first year, Wiz raised $100 million. Then another $130 million worth $1.7 billion. Its clients include United Airlines, Colgate, and Home Depot. The company currently employs more than 1,000 people.

Published by Globes, Israel Business News – en.globes.co.il – on September 25, 2024.