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It was going to happen last year but Wiz said they wanted to IPO. Wonder what that implies about the larger IPO/exits market. Here's the letter sent by the CEO

It was going to happen last year but Wiz said they wanted to IPO. Wonder what that implies about the larger IPO/exits market. Here's the letter sent by the CEO Assaf Rappaport to his team at the time (2024): "Wizards, I know the last week has been intense, with the buzz about a potential acquisition. While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz. Let me cut to the chase: our next milestones are $1 billion in ARR and an IPO. Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice." https://techcrunch.com/2024/07/22/wiz-walks-away-from-googles-23b-acquisition-offer-read-the-ceos-note-to-employees/ https://techcrunch.com/2024/07/22/wiz-walks-away-from-google...

otterley 2y ago
A lot has happened in the last 56 days that has resulted in significant uncertainty in the stock markets. That, combined with the higher offer, apparently changed the board's mind.
film42 2y ago
Wiz by itself is a great business and public markets will price it accordingly, but Google is able to price it much higher because of its unique position. Wiz + GCP sales team will boost adoption of the main product, a Google branded security tool keeps eyes from looking out, and of course, the ability to move huge amounts of revenue from competitors over to GCP is something only a hyper-scaler can tap. At 36x+ valuation, this is still a great deal for Google.
- otterley 2y ago
  On what are you basing your opinion that this is a "great deal"? Google is going to have to earn close to $100B in profit attributable to this acquisition over the next 10 years in order to financially justify it.
  - SJC_Hacker 2y ago
    > On what are you basing your opinion that this is a "great deal"? Google is going to have to earn close to $100B in profit attributable to this acquisition over the next 10 years in order to financially justify it. Maybe like the Motorola acquisition - not so much the profit attributle from the acquisition but the profit they *won't* lose by not acquiring them.
    - diogofranco 2y ago
      I don't think that 100B number is correct. It would be if Google had to give back the business (or it imploded) after 10 years
      - otterley 2y ago
        That $100B is a based on a ballpark estimate of how much a passive investor would expect to earn by putting $32B of their money into a high-yield stock fund (yielding 15% per year, which is a conservative annual growth rate for a cloud provider) and sitting on it for 10 years. If Google can't do at least as well as that, the investor would be better off with the stock fund.
        diogofranco 2y ago
        Yes but I'm saying that they will still own Wiz at the 10 year mark, so you can discount their valuation at the time from the 100B.
        otterley 2y ago
        I accounted for that in my math. Investing $32B for 10 years at 15% interest compounded continuously = $132B.
  - film42 2y ago
    It's smart defense, great offense, and a good product behind it. Each eat a big chunk of that $100B target. I don't see Wiz as a 10 year company, I see it as a forever requirement for companies to manage all of their cloud resources (across all providers). It will be here as long as GCP/AWS are here. I expect a short path to ROI on this one.
dehrmann 2y ago
> Wonder what that implies about the larger IPO/exits market The window is closed and locked. Haven't closed the storm shutters yet.
varjag 2y ago
LOL IPO market is dead for observable future.

otterley 2y ago

A lot has happened in the last 56 days that has resulted in significant uncertainty in the stock markets. That, combined with the higher offer, apparently changed the board's mind.

film42 2y ago

Wiz by itself is a great business and public markets will price it accordingly, but Google is able to price it much higher because of its unique position. Wiz + GCP sales team will boost adoption of the main product, a Google branded security tool keeps eyes from looking out, and of course, the ability to move huge amounts of revenue from competitors over to GCP is something only a hyper-scaler can tap. At 36x+ valuation, this is still a great deal for Google.

otterley 2y ago
On what are you basing your opinion that this is a "great deal"? Google is going to have to earn close to $100B in profit attributable to this acquisition over the next 10 years in order to financially justify it.
- SJC_Hacker 2y ago
  > On what are you basing your opinion that this is a "great deal"? Google is going to have to earn close to $100B in profit attributable to this acquisition over the next 10 years in order to financially justify it. Maybe like the Motorola acquisition - not so much the profit attributle from the acquisition but the profit they *won't* lose by not acquiring them.
  - diogofranco 2y ago
    I don't think that 100B number is correct. It would be if Google had to give back the business (or it imploded) after 10 years
    - otterley 2y ago
      That $100B is a based on a ballpark estimate of how much a passive investor would expect to earn by putting $32B of their money into a high-yield stock fund (yielding 15% per year, which is a conservative annual growth rate for a cloud provider) and sitting on it for 10 years. If Google can't do at least as well as that, the investor would be better off with the stock fund.
      - diogofranco 2y ago
        Yes but I'm saying that they will still own Wiz at the 10 year mark, so you can discount their valuation at the time from the 100B.
        otterley 2y ago
        I accounted for that in my math. Investing $32B for 10 years at 15% interest compounded continuously = $132B.
- film42 2y ago
  It's smart defense, great offense, and a good product behind it. Each eat a big chunk of that $100B target. I don't see Wiz as a 10 year company, I see it as a forever requirement for companies to manage all of their cloud resources (across all providers). It will be here as long as GCP/AWS are here. I expect a short path to ROI on this one.

dehrmann 2y ago

> Wonder what that implies about the larger IPO/exits market The window is closed and locked. Haven't closed the storm shutters yet.

varjag 2y ago

LOL IPO market is dead for observable future.