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I am missing something big here. How and why did they raise 480 million dollars in a year for a cloud security product? It doesn't sound like a capital intensiv

I am missing something big here. How and why did they raise 480 million dollars in a year for a cloud security product? It doesn't sound like a capital intensive business to me. Is that all going to employees?

__loam 1y ago
The answer is that it was 2021 and they were in an incredibly favorable fundraising environment. It's not "what are we going to use this funding for?" It's "investors are flush with stimulus cash and leveraged to the tits from low interest rates and they're banging down our door to invest, let's take the funding"
xyst 1y ago
Nope. They bought up many similar companies in the space to monopolize the niche market. Got big enough to act as bait for some fossilized big tech company.
- deleted 1y ago
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- fancyfredbot 1y ago
  Now that would make sense, like private equity. The Wikipedia page lists three acquisitions at 50,350 and 450 million dollars. But none of them happened until 2023,a couple of years after they raised 450m - by that point they'd raised another 300m and were about to get another billion!
bhouston 1y ago
> I am missing something big here. How and why did they raise 480 million dollars in a year for a cloud security product? I am not an expert at Wiz specifically but I understand this is a "sales lead SaaS business" rather than "product lead SaaS business." Sales lead Saas companies are incredibly costly from a sales and marketing standpoint, you hire a ton of sales people, BDRs and event marketing and other types of outreach and you fly your sales people around the place to win and dine your customers. So you basically invest all your VC money into your sales organization and it probably takes up 65% or maybe more of your head count. The sales people also take a decent percentage of all the ACV contracts they bring in, thus even if you make a ton of sales, they are not profitable for at least the first year. This is growth at all costs.

__loam 1y ago

The answer is that it was 2021 and they were in an incredibly favorable fundraising environment. It's not "what are we going to use this funding for?" It's "investors are flush with stimulus cash and leveraged to the tits from low interest rates and they're banging down our door to invest, let's take the funding"

xyst 1y ago

Nope. They bought up many similar companies in the space to monopolize the niche market. Got big enough to act as bait for some fossilized big tech company.

deleted 1y ago
[deleted]
fancyfredbot 1y ago
Now that would make sense, like private equity. The Wikipedia page lists three acquisitions at 50,350 and 450 million dollars. But none of them happened until 2023,a couple of years after they raised 450m - by that point they'd raised another 300m and were about to get another billion!

bhouston 1y ago

> I am missing something big here. How and why did they raise 480 million dollars in a year for a cloud security product? I am not an expert at Wiz specifically but I understand this is a "sales lead SaaS business" rather than "product lead SaaS business." Sales lead Saas companies are incredibly costly from a sales and marketing standpoint, you hire a ton of sales people, BDRs and event marketing and other types of outreach and you fly your sales people around the place to win and dine your customers. So you basically invest all your VC money into your sales organization and it probably takes up 65% or maybe more of your head count. The sales people also take a decent percentage of all the ACV contracts they bring in, thus even if you make a ton of sales, they are not profitable for at least the first year. This is growth at all costs.