SA¹ú¼Ê´«Ã½

The somewhat stagnant M&A market may be about to get a jumpstart.

One of its biggest ever involving a venture capital-backed startup.

, the parent company of , is in advanced talks to acquire cybersecurity startup for approximately $23 billion. The deal, which would be Google’s largest ever, was first reported in .

In fact, the deal would be the largest ever for a VC-backed company, according to SA¹ú¼Ê´«Ã½ data. It is even bigger than ’s ill-fated $20 billion deal to acquire design unicorn in 2022 — a deal that fell through after facing pressure from regulators.

The deal is even more stunning considering Wiz, a cloud security startup, just locked up the biggest cybersecurity round of the year thus far in May when it raised $1 billion at a $12 billion valuation. The round was co-led by , and .

The Google deal would essentially double Wiz’s valuation from just two months ago.

Wiz said it achieved $350 million in annual recurring revenue in 2023.

Google eyes bigger slice of cloud pie

The deal seems to mean Google is tired of being stuck in third place when it comes to cloud services — behind and ’s . Wiz’s software helps companies secure their cloud applications — meaning Google could increase their security revenue.

This would not be Google’s first big cybersecurity buy. The tech giant bought for $5.4 billion in 2022.

Exits

The cyber M&A market has shown some signs of life in the last six months — although investors likely expected more coming into the year.

Thus far, 45 VC-backed cybersecurity startups have been acquired this year — per SA¹ú¼Ê´«Ã½ — far outpacing the 66 total startups bought all of last year.

On the other hand, the potential Google deal comes at a time when the IPO pipeline still seems slightly frozen — although perhaps thawing. Investors have often pointed to Wiz as a company that could go public whenever it chooses and likely will wait for the most opportune time.

After Wiz’s $1 billion raise in the spring, co-founder and CEO openly talked about the company’s ambition to one day go public.

However, $23 billion can change a lot of plans.

Related SA¹ú¼Ê´«Ã½ Pro query:

Related reading

• Cybersecurity Dealmaking Shows Signs Of Life
• Cloud Security Firm Wiz Raises $1B At $12B Valuation

Illustration: