Israeli cybersecurity company Wiz is in talks to sell existing shares at a valuation of as much as $20 billion, according to a report by Bloomberg.
According to the report, the young cybersecurity company, which in July rejected a $23 billion acquisition offer from Google, is conducting negotiations with a view to the existing shareholders offering between $500 million and $700 million of their holdings for sale. The valuation discussed in the talks is between $15 billion and $20 billion, according to Bloomberg’s source.
The report also quotes a source as saying that the company may raise money for itself directly from investors.
Bloomberg says that Wiz itself, and the venture capital funds that, according to its sources would be involved in a secondary deal, namely G Squared, Thrive Capital and Lightspeed Venture Partners, have not responded to the report.
As mentioned, Wiz rejected a bid from Google in July, in the belief that it will obtain a higher valuation in a future IPO. The company also feared a prolonged regulatory process in the event of an acquisition deal. Bloomberg’s report mentions that Google’s offer valued Wiz at almost twice the $12 billion valuation at which it raised funds in its last round in May this year, when it raised $1 billion.
Aiming at $1 billion annual revenue
Last month, it was reported that Wiz was looking to recruit a CFO, which could signal that it is taking initial steps towards an IPO. Industry sources said that it would take between a year and two years to embark on an IPO after the appointment of an IPO.
In July, the company reported annual recurring revenue of $500 million, and that it was aiming at $1 billion, although it is important to mention that this is not an accounting figure and actual revenue could be lower. Moreover, according to "The Information" website, Wiz is losing over $100 million a year.
The company is growing mainly through investors’ money, and needs injections of 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 reprise on the capital market the kind of offer it received from Google, Wiz needs to become profitable and grow its revenue substantially.
Wiz was founded just four years ago, in 2020, and it specializes in the development of a cloud security platform. The company’s technology enables organizations to identify vulnerabilities and unusual activity in their cloud systems, without the need to install software on the servers. The company’s four founders - Assaf Rappaport (CEO), Ami Luttwak (CTO), Yinon Costica (VP R&D), and Roy Reznik (CPO) - served together in IDF signals intelligence unit 8200. Within its first year, Wiz raised $100 million, and then another $130 million, at a valuation of $1.7 billion. Among its customers are United Airlines, Colgate, and Home Depot. The company currently employs over 1,000 people.
Published by Globes, Israel business news - en.globes.co.il - on September 25, 2024.
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