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Far more likely is Google was not willing to complete the deal and was pulling the plug after looking at internal data. Wiz, fearing the bad press of Google bac
by ds 2y ago
Far more likely is Google was not willing to complete the deal and was pulling the plug after looking at internal data. Wiz, fearing the bad press of Google backing out rushes to tell journalists that THEY are walking away because they are worth more.
Wiz's valuation is insane. Most people havent even heard of them. I think it was a > 60x ARR multiple on this deal. Id actually be kinda pissed if I was a google shareholder and they went through with it.
Something very strange is going on with Wiz. My gut tells me if they ever IPO to go big on puts.
- danpalmer 2y agoWhile I don't have any comment on this instance, in general I think it's easier to hype the public markets who have limited information than it is to type a bunch of people doing due diligence on an acquisition, even if ultimately the latter is still a case of public market valuation through the acquiring public company. This is particularly true in the current age of extremely hype driven retail investing.
- generic92034 2y ago> a bunch of people doing due diligence on an acquisition I bet those people rarely get promoted for preventing an acquisition, though. Probably that is why we see so many crazy acquisitions, in general.
- danpalmer 2y agoAt the SVP level, sure, but at the IC level, I doubt any accountant gets promoted for saying "looks fine", whereas highlighting details that superiors can use to make a decision like this might be something that gets you promoted. This is a misunderstanding I think many non-googlers have, thinking people only get promoted for launches (or in this case acquisitions). It's more nuanced than that: people get promoted for impact and while launches are one obvious form, you can sell pretty much anything useful as impact if you can show how it's useful. In the case of M&A, avoiding a bad acquisition, if you can justify it, would be impact.
- xmprt 2y agoI think the argument is that it's much easier to show impact when you go with the flow and launch a product or complete an acquisition no matter how shitty. It's a lot harder to get promoted for saying that you need to delay launch by 6 months because of some metrics or details even if that would eventually prove to be the right decision.
- 0cf8612b2e1e 2y agoIf only that were the case. I can think of many instances where someone pushing for a bad deal/acquisition/product were rewarded for the visible outcome. Killing a bad idea is incredibly valuable, but I am struggling to think of an instance where that was used to justify kudos. Especially if you are the one who torpedoes a big wigs initiative.
- fatnoah 2y ago> a bunch of people doing due diligence on an acquisition Granted, it was nowhere near this scale, but I've gone through this process as the head of Engineering for the company being acquired. At that point, the business had already decided to acquire, so the process felt more about finding any red flags and/or identifying reasons to adjust the price. For the process itself, the company looked at nearly everything over the course of a few months. Every detail of finances, sales, tech, operations, etc. was scrutinized, culminating with 16 hours (4 for business and 12 for tech/ops) over two days of standing in front of a room with 30 people.
- grogenaut 2y agoHaving done compartmentalized (I wasn't on the team acquiring) technical due diligence two times, my job had nothing to do with if the acquisition was a good idea or not. My job was to vet if they had what they were saying they had or if it was all smoke and mirrors. As others have said, the decision was already made to buy them, I was just vetting that we were buying what we thought we were buying. I also would look for the smouldering tech debt and cost out moving to our tech platforms (AWS). And I'd answer risk but not IP questions for the acquiring manager. The only way I'd tank a deal was by identifying that it was in fact smoke and mirrors.
- deleted 2y ago[deleted]
- dboreham 2y agoAdd me to the haven't heard of them list. Mind you I almost hadn't heard of Crowdstrike and they managed to brick the world.
- ilrwbwrkhv 2y agoYup the world is big and even though we think we have heard stuff, there are more things beyond that. For example, I know a dev who makes mobile apps and clears 500_000 / month in profit and yet their app isn't really "popular". It is crazy.
- exikyut 2y agoHuh, cool. What sector is the app in, what are some other interesting (non-identifying) aspects of the app that stand in contrast to revenue? Is that in ads, or does the app have in-app purchases et al?
- xenospn 2y agoThe only way to make that much of money is with dating apps, IMHO. There’s a million out there and some of them make really good money in certain niches.
- gustavorg 2y agoYou are going to say what the app is, right? right?
- supportengineer 2y agoThrough sales, subscriptions, or ads?
- rob74 2y agoI hadn't heard of either Wiz or Crowdstrike before... while reading the article I was thinking "$23B? Probably AI! And called Wiz? Yeah, must be AI...". Turns out I was wrong after all...
- heraldgeezer 2y ago
- kuzmanov 2y agoThis is exactly how I felt as a shareholder. There is no real reason to pay this much and it seems like Google is the one that walked away from the deal.
- pjc50 2y agoShareholder in Wiz, or Crowdstrike?
- nar001 2y agoGoogle wasn't trying to buy Crowdstrike, so Wiz
- underdeserver 2y agoEh, more likely OP is a shareholder of Alphabet.
- chatmasta 2y agoThey’ve had some really nice writeups but I always thought they were your generic security firm doing some bug hunting. Recently I happened upon their domain submissions to HN and saw they raised $1b+ and was like wtf? What do they actually do? I mean what are their products that people pay for? Maybe there are obvious answers to these questions, but if a company is worth $23bn I’d expect that as somebody in the industry, I could answer them without doing in depth research. This is exactly the kind of gut feeling of “something’s off” that I’ve learned to pay attention to.
- walterbell 2y agohttps://old.reddit.com/r/cybersecurity/comments/1c1s9r2/wiz_is_insert_your_experience/ https://old.reddit.com/r/cybersecurity/comments/1c1s9r2/wiz_... > Wiz combines a graph search for asset management with agentless vuln and malware scanning that clones EBS volumes and scans them on their infrastructure. That's a great combo for vuln management, but has some downsides like delays between scans and cloud costs. They have a sensor with solid detection rules, and are okay at a bunch of other stuff like cloud log threat detection and sensitive data detection. They've basically pushed what you can do without an agent to the limit.
- chatmasta 2y ago> clones EBS volumes and scans them on their infrastructure Crowdstrike: “you just install a kernel module with ring zero access and we’ll make sure you’re protected” Wiz: “hold my Red Bull…”
- golemiprague 2y agoFrom the explanation here it sounds completely opposite concept, they download the server and check it rather than doing the checks on production environment
- chatmasta 2y agoYeah, I was thinking more about the risk of data leaks.
- moandcompany 2y agoThe Groupon of 2024?
- xyst 2y agoA company built during the pandemic, likely peaked following the Solar Winds aftermath. yup, overvalued
- raldi 2y agoWouldn't they be giving up a huge breakup fee if that were the case?
- sulam 2y agoNo, breakup fees are post term sheet.
- vlovich123 2y agoMaybe not if the breakup fee is forfeited if due diligence reveals fraud? Not sure.
- qaq 2y agoWell realistically if they have a chance to take on Crowdstrike they might not be wrong to walk away.
- solatic 2y agoOn the one hand, even with the post-crash dip, CRWD has a $60.9 billion market cap, there's certainly marketshare to be taken from them. On the other hand, Wiz doesn't have an endpoint protection product (which is what failed for CRWD). They'd have to build one from scratch, which requires dedicated talent (engineers with kernel experience) that they might not have. If anyone is going after CRWD it'll be one of their other competitors.
- thriftwy 2y agoThese numbers sound like a complete out of world fantasy to me. CRWD has a product that the user is not going to notice, best case. Now you said Wiz doesn't even have that one (what does it have then?) And their valuation is on par with the whole annually Western support of Ukraine. A country at war and with 30M people in it. That for some completely invisible product. It is also 17 millions of these most expensive brand new 155m artillery shells.
- sofixa 2y agoCrowdstrike does endpoint security (user's PCs and servers too for checkbox ticking reasons). Wiz does cloud security. The same thing as Crowdstrike, but runs in your cloud environment (AWS/GCP/Azure) to detect issues there. Different customers, different profiles, different costs and prices.
- thriftwy 2y agoI just don't see why that should have $23B market cap as opposed to $230M. A small team can challenge them with similar product.
- 2y ago
- helsinkiandrew 2y ago> Far more likely is Google was not willing to complete the deal and was pulling the plug after looking at internal data Wouldn't it be more likely that they would have lowered their offer after seeing the internal data - perhaps so much that Wiz would certainly walk away.
- deleted 2y ago[deleted]
- wrsh07 2y agoWhere are you getting >60x?? > For Wiz, a $23 billion sale price was irresistible. Google would value the startup at 46 times the $500 million in annual recurring revenue it currently generates, a person familiar with the matter said. https://www.wsj.com/tech/how-startup-wiz-went-from-zero-to-a-possible-23-billion-sale-to-google-in-four-years-edb7c02b?mod=article_inline https://www.wsj.com/tech/how-startup-wiz-went-from-zero-to-a... I'm very curious about what due diligence found, but we aren't likely to get more info until we see their s-1