[HN Gopher] Google-Wiz deal fizzles out, company will pursue IPO
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Google-Wiz deal fizzles out, company will pursue IPO
Author : uger
Score : 184 points
Date : 2024-07-23 02:42 UTC (20 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| jmsflknr wrote:
| Originally covered here:
| https://news.ycombinator.com/item?id=41042004
| worthless-trash wrote:
| This is great news !
|
| I use wiz for my home lighting and automation, I'm so glad that
| google did not buy it due to its habit of killing things that I
| find useful.
|
| I want my hardware to last longer than the current decision
| makers employment.
|
| Edit: hah, the site becomes available AFTER i submit so now I can
| read it.
| CaveTech wrote:
| This is not the same Wiz.
| samspenc wrote:
| Didn't realize there was a WiZ that specializes in home
| lighting https://www.wizconnected.com/en-us
|
| Per their About Us page, they are an "IoT platform for smart
| lighting solutions and smart services" and "offer people
| connected lighting".
| Marsymars wrote:
| That's actually the only "wiz" I was familiar with in the
| tech space. They're Philip Hue's budget line for the past 5
| years and they've got various partner brands (most the
| notably Walmart house brand) that use their smart platform.
| rando_person_1 wrote:
| How are you using a cyber security platform for home
| lighting/automation?
| HaZeust wrote:
| This is wiz.io BUT I appreciate the enthusiasm
| immortal3 wrote:
| After the acquisition, I think Wiz would have to only focus on
| Google Cloud which might be a major limiting factor in the
| company's future. But other than that, It surprises me that, a
| $23B offer is rejected from the perspective of Employees. IPO
| won't provide the same level of liquidity opportunities.
|
| I have used Octa and it's a decent platform, not a magical one.
| Creating a similar platform for Google Cloud should be feasible
| with the level of Google resources.
| dmitrygr wrote:
| > It surprises me that, a $23B offer is rejected from the
| perspective of Employees
|
| HA! Who asked them? I've never seen a startup ask the employees
| whether to take an acquisition offer.
| satvikpendem wrote:
| Yep. I'm pretty sure just the C suite made this decision
| unilaterally.
| mlyle wrote:
| The board makes the decision, but needs management to make
| things work either way, so management has a pretty big
| voice, too.
| cen4 wrote:
| Cause their founders are already Billionaires.
|
| Can you imagine Billionaires reporting to the average corporate
| robot at large corp?
| ergocoder wrote:
| Which founder is a billionaire? What is their net worth?
| walterbell wrote:
| Each of the four founders (CEO, CTO, Product, R&D),
| https://www.calcalistech.com/ctechnews/article/hjpwti2dr
| cinntaile wrote:
| I think that's including their current Wiz holdings?
| ergocoder wrote:
| I thought they meant the founders were already
| billionaires before founding Wiz...
| krembo wrote:
| Not billionaires, but all together already sold a company
| to Microsoft at age 30, and are not the avg Joe.
| wiz21c wrote:
| Oh yes, I fancy that. Quite a lot actually. The joy of seeing
| equal humans.
| karmakurtisaani wrote:
| Ah yes, the fact that I have the wealth of a small nation
| should not by any means mean I cannot mingle amongst equal
| humans who work for me. Just a bunch of equal humans
| hanging out. How nice and equal indeed!
| ds wrote:
| 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 wrote:
| While 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 wrote:
| > 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 wrote:
| At 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 wrote:
| I 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.
| dboreham wrote:
| Add 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 wrote:
| Yup 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 wrote:
| Huh, 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 wrote:
| The 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 wrote:
| You are going to say what the app is, right? right?
| supportengineer wrote:
| Through sales, subscriptions, or ads?
| rob74 wrote:
| I 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 wrote:
| Crowdstrike is enterprise only.
|
| Do you know of Active Directory? Most have no idea, even
| though it is a Windows Server feature from 2000.
|
| Some will live a life and even work not knowing.
| dingaling wrote:
| AD is fairly well known due to its relationship with LDAP
| and Kerberos.
|
| Samba can act as an AD DC.
| RandomThoughts3 wrote:
| AD is incredibly more popular than Kerberos despite part
| of it using the protocole. Microsoft is everywhere in the
| corporate world and most people know of AD but have never
| heard of neither LDAP nor Kerberos.
|
| And to be honest, it's fairly understandable. AD manages
| to be somewhat turnkey while doing the same thing on
| Linux systems is a major pain.
| ykonstant wrote:
| What is the usual way of doing this on Linux systems?
| bombcar wrote:
| Every time I've ventured into it I ended up using Samba
| to pretend to be Active Directory vs LDAP + Kerberos ...
| kuzmanov wrote:
| This 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 wrote:
| Shareholder in Wiz, or Crowdstrike?
| nar001 wrote:
| Google wasn't trying to buy Crowdstrike, so Wiz
| chatmasta wrote:
| They'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 wrote:
| 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 wrote:
| > 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 wrote:
| From the explanation here it sounds completely opposite
| concept, they download the server and check it rather
| than doing the checks on production environment
| chatmasta wrote:
| Yeah, I was thinking more about the risk of data leaks.
| pwdisswordfishd wrote:
| This sounds uselessly crippled, as it's not going to catch
| malware that doesn't drop anything to disk, or that
| adequately cleans up after itself if it does.
| nshelly wrote:
| I would assume they could also dump memory, i.e.
| `/dev/mem`. Agreed they would need to also do frequent
| memory snapshots, but lots of malware will also run in
| the background waiting indefinitely, and often as the
| same name as common Linux processes but different hashes.
| qeternity wrote:
| You would need an agent to do this. Cloning EBS won't
| dump memory.
| stefan_ wrote:
| The people who have /dev/mem and run this garbage must
| form a complete overlapping circle.
| moandcompany wrote:
| The Groupon of 2024?
| xyst wrote:
| A company built during the pandemic, likely peaked following
| the Solar Winds aftermath.
|
| yup, overvalued
| raldi wrote:
| Wouldn't they be giving up a huge breakup fee if that were the
| case?
| vlovich123 wrote:
| Maybe not if the breakup fee is forfeited if due diligence
| reveals fraud? Not sure.
| sulam wrote:
| No, breakup fees are post term sheet.
| qaq wrote:
| Well realistically if they have a chance to take on Crowdstrike
| they might not be wrong to walk away.
| solatic wrote:
| On 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 wrote:
| These 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 wrote:
| Crowdstrike 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 wrote:
| I just don't see why that should have $23B market cap as
| opposed to $230M. A small team can challenge them with
| similar product.
| pjc50 wrote:
| I think this is just a representation of where the money
| is in the world. Two things:
|
| - stocks are called _stocks_ for a reason, they 're not
| flows. $60bn is effectively an estimate of all future
| profits of the company over its lifetime
|
| - Crowdstrike generates a return by charging enterprises
| huge amounts of money to feel secure and tick security
| boxes (Actual security is questionable). Big enterprises
| have a _lot_ of money to waste, but they feel they 're
| getting a return on it
|
| - hardly anyone outside Ukraine gets a specific _return_
| from backing Ukraine. The same goes for all sorts of
| other worthy projects of the "end world hunger" kind -
| there's huge benefits, but not to the people actually
| spending the money.
| falcor84 wrote:
| >stocks are called stocks for a reason, they're not flows
|
| Indeed, and of course we have Kalecki's famous quip that
| economics is "the science of confusing stocks with flows"
| qaq wrote:
| Pretending that being geopolitical superpower has no
| direct economic benefits is just silly. If USD lost the
| status of world's reserve currency it would have pretty
| catastrophic consequences for US economy.
| pjc50 wrote:
| How do I, as an individual investor, capture the return
| of sending a shell to Ukraine?
|
| > If USD lost the status of world's reserve currency it
| would have pretty catastrophic consequences for US
| economy
|
| .. but for everyone at once. Collective action problem.
| You've argued why it's in the interest of the US
| government to tax people and send shells to Ukraine, but
| this is not an argument for Blackrock to divert VC
| funding to individual armored brigades.
| qaq wrote:
| Very true
| qaq wrote:
| It's hard to make a leap from war to company valuation.
| Also Ukraine support is highly inflated number. If say
| Ukraine gets supplied with an old design MLRS rockets
| from US that was slated to be replaced in a few years and
| had very limited shelf life remaining the number counted
| is not the market cost of that old rocket (which would be
| a few 100K) but the 3 mil new top of the line replacement
| thing that US is producing for itself and Ukraine will
| never see.
| borski wrote:
| Wiz does not do endpoint security. Different products
| entirely.
| deycallmeajay wrote:
| Not yet...
| qaq wrote:
| They certainly have resources to expand into that if needed
| toomuchtodo wrote:
| They'd be competing with Crowdstrike, SentinelOne,
| Microsoft Defender, and Trend Micro not to mention
| existing CNAPP/CSPM offerings that have an agent for
| cloud runtime security as well as other cloud runtime
| security focused startups.
|
| Adding a runtime security and EDR offering is not going
| to get them to a $23B valuation.
| qaq wrote:
| Sure and many others but outside of CrowdStrike most are
| not very competitive and being a fresh entry has it's
| benefits.
| borski wrote:
| "Fresh" is the key word. You need to have fresh ideas,
| and I am certain Wiz doesn't, as it relates to endpoint
| security.
|
| I agree Crowdstrike sucks. I've been beating that drum
| for the better part of a decade.
|
| Building a "new crowdstrike" by a different name won't
| win.
| borski wrote:
| It is an entirely different problem with almost nothing
| in common with their existing product, and there are a
| _ton_ of incumbents, some of whom are even quite good
| (Carbon Black, SentinelOne, etc)
| qaq wrote:
| There were quite a few of those when CrowdStrike entered
| there is always room there.
| borski wrote:
| You're trying to prove a point with no point. Yes, anyone
| can build anything. There is always room for more
| contenders when there are existing incumbents. The sky is
| still blue, and the grass is still green.
|
| But it would make no sense for Wiz to do that, as they
| don't have any "secret sauce" as it comes to endpoint
| security. They haven't solved the problems that took
| Crowdstrike down.
|
| It is not in their wheelhouse. It would be a waste of
| money and time.
|
| Could they? Sure. Should they? Definitely not. It's a
| commoditized space at this point, unless they have some
| new ideas which, if they did, they'd have already begun
| discussing.
|
| Carbon Black did well because it turned endpoint security
| on its head. Not because it was a "better AV"
|
| My $.02
| helsinkiandrew wrote:
| > 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.
| mrinfinitiesx wrote:
| Sometimes it's not about the money, it's actually about systems
| security and the level of which you actually want to build,
| deploy, and protect great products and infrastructure. 23 billion
| is a LOT of money. Looking forward to see how the IPO plays out.
| chii wrote:
| > Sometimes it's not about the money
|
| it's always about the money.
| mrinfinitiesx wrote:
| Yeah now that I think about it I realize how many times I've
| said that to people.
| blitzar wrote:
| Whenever somebody says to you "it's not about the money" or
| "i'm not doing this for the money"
|
| It's (entirely) about the money.
| underdeserver wrote:
| Well, Wiz's founders reportedly made $10-$30 million each on
| the Adallom sale. It might be about the money but it's not
| like they need it.
| chii wrote:
| > it's not like they need it.
|
| you dont know that. when you start getting high networth,
| you end up comparing yourself to the _even higher_ networth
| people.
| justahuman74 wrote:
| Can they just buy all the shares on the open market then?
| djbusby wrote:
| That won't be all the shares of the company, just a lot of
| them. And doesn't give you the control like an acquisition
| would.
| blackeyeblitzar wrote:
| If you mean before the IPO, it depends on the stock plan of the
| company. They may have clauses that prevent trading on
| secondary markets. I don't think this is fair to employees
| personally, but it is the norm for companies to have various
| abusive forms of control over the options they grant employees.
| refurb wrote:
| Once it IPOs?
|
| Wiz might not mind at that point.
|
| But if they did mind, it would be a hostile takeover. The way
| Wiz can prevent it is by approaching their largest shareholders
| and asking them to help prevent it.
| runevault wrote:
| Depends on what % of the company is put on the market. Could
| Google buy every available share if they are willing to spend
| enough money? Sure. But if there are not enough shares on the
| market to give them a controlling interest they still can't
| hostile takeover that way.
| creer wrote:
| Relatively few shares will be on the open market. If these few
| shares are sought after (bought by Google), the price will go
| way higher as more shares are bought out by Google. It's
| possible to mount actions where things are kept "quiet" and
| "hard to notice" (See Hermes vs LVMH a few years ago in France)
| - but even then it can fail (it did). Overall no, you can't buy
| the whole company at anywhere close to the stock market "market
| cap". It "works" when the acquirer gets control (enough shares
| to eventually vote out the current board leadership.)
|
| What sometimes does work is to make a formal offer to buy all
| the shares that are presented, at some price quite a bit higher
| than the current market price. Sometimes that works.
| Occasionally that works for very little above the current
| market price.
| mirzap wrote:
| I doubt it since this would be seen as a hostile takeover. They
| would then issue more shares in response to the takeover
| attempt.
| Centigonal wrote:
| Founded in 2020, with a $23B valuation, aiming for $1B ARR?
|
| CloudFlare is worth $26B and had ~$1.3B revenue last year.
| Something's fishy here.
| oceanplexian wrote:
| Look at their financials, CloudFlare might be popular among the
| HN crowd but the stock is massively overvalued. At the end of
| the day they are a commodity CDN that somehow can't run a
| profitable business.
| ilrwbwrkhv wrote:
| And now with their bad hiring practices and shady business
| deals they might not be popular among HN crowd for long too.
| jppope wrote:
| Yeah nah... they have great products and their primary
| business is allowing them to enter markets where other
| companies can't compete. The valuation is based on potential
| not the business as it stands today.
|
| And to your point they are popular with the HN crowd which is
| usually a strong indicator.
| foolswisdom wrote:
| I think GP's point is that wiz's valuation makes even less
| sense.
| dilyevsky wrote:
| I did look at their financials - 77% gross margin with 30%
| revenue growth. Much higher than "commodity cdn" can command.
| If they cut marketing and r&d they'd be bagging half a b a
| year in profit but they are investing in growth as they
| should because it's working
| J_Shelby_J wrote:
| Cloud flare will still be the internet in ten years, while
| Amazon will just be Walmart,
| walthamstow wrote:
| Amazon is the internet too. The us-east-1 outage in 2023
| took down a lot of stuff.
| oblio wrote:
| AWS is making $100+bn per year and growing at about 20%
| per year.
|
| Good job, "Walmart"!
| vinay_ys wrote:
| And, that's a dis, why?
| DowagerDave wrote:
| WalMart has a market cap of almost 600 Billion dollars.
| Weird dis.
| zild3d wrote:
| cloudflare is a commodity CDN, amazon is an ecommerce site
| paxys wrote:
| So they have similar valuation and ARR as Cloudflare. What is
| fishy?
| osrec wrote:
| Cloud flare has it, they are aiming for it. Definite income
| vs possible income cannot be priced in the same way, assuming
| the CF valuation is justified.
| DowagerDave wrote:
| Wiz hit 100M in mid 2021 and 350M ARR last year; now they're
| going to automagically get that to a Billion in a much
| tougher climate?
| Voloskaya wrote:
| Valuations have always been more about potential than about
| current state in startup world. Wiz is 4 years old and already
| at $350M ARR, that's a meteoritic rise.
| jimt1234 wrote:
| Why settle for a measly $23B, when a successful IPO will get them
| 10x that?
| 0x500x79 wrote:
| There are a lot more factors that they will be subject to in an
| IPO that I think they could have avoided through this deal.
| IPOs/Stock market has not been kind to companies that do not
| have great margins and the current rumor mill has Wiz spending
| quite a lot in infrastructure costs to power their platform (a
| lot of it is built on Neptune and snapshot data
| transfer/processing is costly).
|
| At the end of the day there were a lot of employees up and down
| the organizational chart that would have been very happy with
| this deal. So I wish that we could see the inner workings of
| what went wrong.
|
| The constant rumor mill around Wiz keeps turning, and one
| starts to ask if there are nefarious actions at play.
| shrubble wrote:
| Could it be cold feet or fallout from the Crowdstrike debacle?
| walterbell wrote:
| https://www.calcalistech.com/ctechnews/article/b1a1jn00hc
|
| _> [Cyberstarts] has a portfolio of only 22 companies whose
| combined value is $35 billion. Five of these companies are
| unicorns, first and foremost Wiz, which seems to be breaking all
| the rules of growth and success and setting new standards in the
| industry.. In all three of his funds, Ra 'anan shows an internal
| rate of return of more than 100%, an unusual figure even for the
| best funds in the world.. The first sales come from the loyal
| CISOs who work with the fund.. The whole CISO advisory committee
| issue has gotten out of hand for corporate America._
|
| https://www.calcalistech.com/ctechnews/article/hjpwti2dr
|
| _> Wiz announced two months ago that it had raised $1 billion at
| a $12 billion valuation, bringing the company's total funding to
| $1.9 billion._
| leereeves wrote:
| The first link alleges that Cyberstarts pays kickbacks to CISOs
| who buy their products. Is that legal?
| windexh8er wrote:
| It's definitely not uncommon. Illegal? Should be, the
| question is how they got paid and for what. There are so many
| C-level shills these days, it's sickening.
| lmeyerov wrote:
| Everything is securities fraud, so a payola consortium
| pumping Wiz through funding rounds sounds bad. Wiz is
| great, so the question is if they are > $23B great, and how
| they got there. And more so, why would a gov prosecutor bet
| on this case over others, or a private investor who has
| shares & reputation at risk.
|
| OTOH, maybe The Honest Services Statute where CISOs violate
| their fiduciary duty by prioritizing security/risk budget &
| focus to a VC paying them. I don't see most impacted
| companies making this public vs a warning or voluntary
| resignation.
|
| It clearly happens a lot, but the only successful
| prosecution I remember was at Netflix:
| https://www.justice.gov/usao-ndca/pr/former-netflix-
| executiv... . A funny thing is the VC is doing all this
| semi-officially: many but not all of the illegal bits go
| away - the gov has less to prosecute on when everyone files
| their taxes accurately !
| borski wrote:
| It's not a kickback because Cyberstarts is providing 'points'
| which eventually equate to carry for them as advisors to the
| startups in the fund, to which they donate their time,
| expertise, and so on.
|
| The implication, you could argue, is that that also includes
| purchases from the startups, but that isn't at all a
| requirement of the program, at least as far as anything legal
| is concerned, to my knowledge.
|
| That said, it makes sense that if you're advising companies
| that are building products with your advice in mind, they're
| going to be solving problems you need solved, so you're more
| likely to buy from them. The fact that you have a good
| working relationship with them already is a bonus, of course.
|
| That's the optimistic view.
|
| The cynical view is that it's no different from drug
| companies paying doctors to shill their pills.
| mupuff1234 wrote:
| From the start this seemed more like a PR move from Wiz than a
| real offer.
| blindriver wrote:
| Lots of companies have regretted passing up on an acquisition,
| especially one this large and of a company this young. My bet
| would be that this company is making the same mistake as Yahoo,
| Groupon, etc.
| mirzap wrote:
| A lot of them didn't, ie, Facebook, Google, Twitter, Netflix,
| Snapchat.
|
| I wonder if this rejection is related to the CrowdStrike
| incident. Are they expecting or already experiencing a
| significant influx of new clients? I'm unsure if their services
| overlap, just curious.
| joedwin wrote:
| tbh, Google itself rejected the acquisition.
| rapsey wrote:
| Snapchat is still not profitable and doing very poorly in the
| public market.
| zaguios wrote:
| The offer was for $3 billion. They are worth $24 billion
| today...
|
| In absolutely no world would have taking that offer been
| the right decision.
| nothrowaways wrote:
| 23B is a staggering number for a 4 year old cyber security
| startup with 900 employees
| onion2k wrote:
| As with most things in tech, time served is pretty much
| irrelevant. If you do something valuable fast you can build a
| lot of value quickly.
| 4gotunameagain wrote:
| You can build a lot of _perceived_ value, as we 've learned
| from so many acquisitions becoming hot potatoes a few years
| down the run.
| llm_trw wrote:
| That's 800 employees too much.
|
| The reason why tech sucks these days is because everyone over
| hires and empire builds.
| qeternity wrote:
| Sales. They have huge ARR after a few short years because
| it's a sales org with a few engineers scattered about.
| llm_trw wrote:
| So not a tech company. Fair enough.
| sofixa wrote:
| Too much to build the product, but you need researchers
| (check out their blog), marketing, sales, solutions
| engineers, support, legal, accountants, etc.
| underdeserver wrote:
| That's a big claim. Have you seen their product? It's
| basically a collection of 10-15 distinct cloud security
| products - CDR, data classification, vulnerability scanning,
| asset inventory, etc. etc. etc. all working together.
|
| Each one of these is a 50-person company on its own.
| flynapse wrote:
| Major respect. I can only wonder what it feels like to possess
| that intense confidence. The appeal of 'a bird in hand' would
| almost certainly overwhelm most of us.
| ssl-3 wrote:
| I feel like I am uninformed.
|
| Can someone provide some background?
|
| Who in the fuck is Wiz, and why in the fuck might anyone think
| that they're worth 11 figures?
| SJC_Hacker wrote:
| I've been waiting for the Silly Valley insanity to stop for
| about the past 15 years, but its like its been permanently
| stuck in 1999 mode. With a few brief hiccups like Juicera and
| Theranos. I guess VCs just don't have anything better to do
| with their money, than throw it at a wall of shit and see what
| sticks
| boguscoder wrote:
| Im afraid its been 25 not 15 years since 1999 ;(
| ncruces wrote:
| Whoosh... that's the entire point you missed right there.
| blobbers wrote:
| ... what was the point? I missed it too!? VCs returns
| looking like power law investment in the back end / mud
| on wall in the front end of a fund?
|
| Or that the author has been waiting for VC investment to
| stop? I don't understand what he's trying to suggest.
| piltdownman wrote:
| In a ZIRP era, they'd be non-optimal to do anything else.
|
| 80 failed projects is still a +ev outcome for a VC if they
| hit their 100x proposition on the 81st.
| teractiveodular wrote:
| Instead of old-school installing agents to run on your VMs
| Crowdstrike style, with all the maintenance, performance and
| crash-the-world risks that entails, with Wiz you can clone your
| EBS volumes and examine them for vulnerabilities at your
| leisure. It's a neat party trick, but I'm also not convinced
| it's worth 11 figures.
| ignoramous wrote:
| > _It 's a neat party trick, but I'm also not convinced it's
| worth 11 figures._
|
| Depends on just how many CISOs they can sell anything to
| (iow, whether Gili Raanan has invested or not):
| https://www.theinformation.com/articles/how-a-former-
| sequoia...
| warbaker wrote:
| and nobody beats them!
| resist_futility wrote:
| >Wiz's founders previously built security startup Adallom, raised
| money from Sequoia and Index and sold the startup to Microsoft
| for $320 million in 2015.
|
| Copy, Paste and ask for 70 times more?
| krembo wrote:
| Totally different business, problem and solution. You should
| read abit before commenting like that.
| temporalparts wrote:
| I think there's some behind the scenes drama. It takes a LOT of
| time and investment from both sides to build up to a $23B offer.
| I wonder if there was something some Alphabet exec did to piss
| off the founders. Or Wiz was stringing Alphabet along to hype up
| the IPO.
| olalonde wrote:
| > The company hit $100 million in annual recurring revenue after
| 18 months
|
| That's fast... Is that 18 months after launch or literally 18
| months after starting development?
| mylastattempt wrote:
| Your quote from the article, is a link to another article,
| which provides the answer:
|
| > The cybersecurity software vendor said in August that it
| reached $100 million in annual recurring revenue after selling
| its product for just a year and a half.
|
| So that's 18 months after formal launch. Since we don't have
| their financial statements, you can only guess wether this is
| the value of signed deals or a review of actual recognized
| revenue for those 18 months. I suspect the first.
| globular-toast wrote:
| Why would Google even consider this? They're an advertising
| company and haven't really made any money from anything but
| advertising. What would they do with this?
| animuchan wrote:
| I suppose they'd add this to the GCP family of products, same
| as Apigee.
| krisgenre wrote:
| Maybe this was about advertising after all ;). I now know there
| is a company named Wiz.
| KoftaBob wrote:
| The proportion of their revenue that comes from segments other
| than advertising is growing. I would imagine like most
| companies, Google/Alphabet wants to diversify their source of
| revenue/profit over time.
|
| https://www.statista.com/statistics/1093781/distribution-of-...
| sebastiennight wrote:
| Adding a cloud security offering to your existing "cloud
| infrastructure" suite makes sense.
|
| Buying a strategic complement where you can multiply the
| company's ARR overnight by integrating with your own suite
| makes sense.
|
| Or commoditizing this complement by offering it for free as a
| differentiator to competitors (Azure, AWS) would also make
| sense.
|
| Plenty of options to choose from.
| newusertoday wrote:
| sometimes it works snapchat rejecting facebook offere which is
| worth more now, sometimes it doesn't groupon rejecting googles
| offer.
| KoftaBob wrote:
| Fun fact:
|
| > Wiz was founded in January 2020 by Assaf Rappaport, Yinon
| Costica, Roy Reznik, and Ami Luttwak, all of whom previously
| founded Adallom
|
| > Adallom was founded in 2012 by Assaf Rappaport, Ami Luttwak and
| Roy Reznik, who are former members of the Israeli Intelligence
| Corps' Unit 8200
|
| https://en.wikipedia.org/wiki/Wiz_(company)
| xenospn wrote:
| 8200 veterans are highly sought after, and you can probably get
| a blank check from any VC if you have that on your resume.
| thegrizzlyking wrote:
| Most likely reason is FTC. Wiz integrates with big 4 cloud
| providers. No way FTC is allowing Google to take control. JD
| Vance's nomination and support for current FTC chair(Lina Khan)
| doesn't help.
|
| Current FTC is good(personal opinion) from anti trust point of
| view but maybe bad for startup exits[0].
|
| [0] https://x.com/ID_AA_Carmack/status/1812978264484552987
| titanomachy wrote:
| If they're actually worth anything near $23B they can just go
| public. I'm sure they'll be fine haha
| daghamm wrote:
| Can someone explain to me how a young security company with few
| employees can be worth millions?
|
| It's not like Google is after they client list, they would
| probably limit them to Google services after acquisition anyway.
| taspeotis wrote:
| > Can someone explain to me how a young security company with
| few employees can be worth millions?
|
| I assume you meant to say billions, since this is a $23B offer
| they turned down.
|
| If I had to positive spin on the valuation: it's chump change
| if Wiz (who seem to be a very capable cybersecurity firm) are
| able to integrate themselves deeply into Google's
| infrastructure and secure it up the wazoo, since a 5% cost to
| Google's share price for reputational damage caused by GCP
| getting r00ted would be ... 5% of Google's 2.25T market cap ...
| $112.5B.
|
| cf. Crowdstrike's share price after some bad news: they are
| down 30% over the last five days.
| Sohcahtoa82 wrote:
| > cf. Crowdstrike's share price after some bad news: they are
| down 30% over the last five days.
|
| The stock is recovering. Traders have short memory. By the
| end of the year, it'll probably be $400 unless there's a huge
| class action against them that starts looking really bad for
| them.
| kats wrote:
| Good for Google.
| shmatt wrote:
| I have to take the other side than most comments here. Most of
| the coverage about the Wiz offer called out that this was an odd
| way for them to end up in - as the founders openly talked about
| waiting for that $1b ARR since almost day one
|
| To me it feels like Google was trying to put pressure on
| employees and any other non board option holders. There were
| dozens of articles and analysis of exactly bow many new
| millionaires / billionaires will be minted after the sale in
| Israel
| sofixa wrote:
| > that this was an odd way for them to end up in - as the
| founders openly talked about waiting for that $1b ARR since
| almost day
|
| That doesn't mean much. I've worked at a company that kept
| taking about "our goal is to reach magic number X" and etc.
| until one they announce a sale.
|
| Situations change, business plans evolve, and money talks.
| daghamm wrote:
| For those of you who - like me 30 minutes ago - have no idea what
| Wiz does and what CNAPP is:
|
| https://pulse.latio.tech/p/wtf-is-cnapp
| e12e wrote:
| Thank you. I think that deserves a submission by itself:
|
| https://news.ycombinator.com/item?id=41049942
| anon5278525283 wrote:
| Today's (relevant) SMBC: https://www.smbc-
| comics.com/comic/investment-2
| drumhead wrote:
| This is positive for Google. Spending $23bn on a company of that
| size was insane. Shareholders are probably relieved.
| jsiepkes wrote:
| > Shareholders are probably relieved.
|
| Don't think so. Google has a relatively good track record for
| acquisitions. So I don't think they were really worried.
| Kostchei wrote:
| As a user of Wiz (and I like what I get from them) ,I am relieved
| . 1. huge valuations are bad for customers- that investor cash
| has to come back from somewhere 2. Google has a habit of
| subsuming products into their stack and either sunsetting them or
| holding them so close that nobody uses them (beyondcorp etc)
| *spelling
| mihaic wrote:
| Over a certain threshold, all software companies seem to
| degenerate into sales companies.
|
| Honestly, I'm just mildly shocked of the $23B valuation for a
| product that I'd expect to have taken waaay less than 1% of that
| in dev costs. What I'm more shocked is that Google decided they
| can't build the same thing themselves. Maybe I don't understand
| the complexity of the product?
| llm_trw wrote:
| >What I'm more shocked is that Google decided they can't build
| the same thing themselves.
|
| Faang is where amazing engineers go to produce nothing of
| value.
| Ygg2 wrote:
| Hey, some of that non-value is actually negative! See ads.
| Ragnarork wrote:
| I disagree, a lot of value is created at FAANG by those
| amazing engineers. It's the free and open source tools and
| frameworks, though.
| llm_trw wrote:
| A lot of value is also created by drug dealing giving out
| free hits, or Microsoft giving free windows licenses to
| universities back in the day.
| dinobones wrote:
| Apparently they're used by 40% of the Fortune 100.
|
| At a generous 20xARR valuation this is still 1b ARR.
|
| 1 billion / 40 = annual revenue of $25M from each contract.
|
| Hwat. Help it make sense.
| underdeserver wrote:
| They probably have customers outside Fortune 100.
| ajdhG wrote:
| I'm not shocked that Google cannot build things these days.
| There are of course good engineers in areas like the Linux
| kernel, Golang etc., but in other areas it is just show and
| politics.
|
| One of the political teams was fired recently, so perhaps
| Google is in the process of reversing course, but that is just
| a guess.
| trhway wrote:
| Israel's GDP is $500B+ . So Google's offer would bring 4%+ of one
| year's GDP into Israel. And these guys refused it. One can wonder
| what the government would think here :)
| qeternity wrote:
| Most of the shareholders are not in Israel.
| trhway wrote:
| You seem to be half-way right. Wiz took 1.9B total. The last
| 1B was on $12B valuation and the previous rounds, except
| series A where i don't see data, were also under 10%. So,
| yes, the investors probably own about a half.
| underdeserver wrote:
| Thankfully, Israel is a free country and the government can't
| force you to sell.
| trhway wrote:
| Not necessarily force. Government can do a lot toward either
| direction - facilitating or blocking a deal. And when
| somebody comes with a boatload of money noticeable on the
| scale of your GDP, the government would hardly stay neutral.
| Just look at all the circus around Foxconn in Wisconsin for
| example and that is much smaller scale wrt. US GDP.
| underdeserver wrote:
| Well, seems they did stay neutral. To be fair the Israeli
| government is somewhat preoccupied right now.
| jwally wrote:
| > saying no to such humbling offers is tough
|
| Minor pet peeve: misuse of the word "humbling".
|
| A $23B offer is not humbling (on my planet at least). Humbling
| would be turning this offer down and then failing to get enough
| interest to generate an ipo.
| n4r9 wrote:
| You might be right. On the other hand, Rappaport might be
| humbled thinking about how fortunate circumstances and others'
| hard work has led to this offer. He could be thinking "gosh, I
| do not feel I deserve that".
| glandium wrote:
| I was like "how the f* is a website builder possibly worth $23B"
| and then I realized Wiz is not Wix. And then I realized Wix has a
| market capitalization of $9B, and I'm still WTF.
| nikanj wrote:
| Wix has over $1.5B annual recurring revenue, so a market cap of
| $9B makes sense. You and I might not use them, but it is a real
| business, not just a hype bubble.
| rurban wrote:
| My non-IT wife is using wix for her homepage. She loves it, I
| never heard of it before. 9B sounds okish.
|
| But wiz? There are reading like Mossad/Unit 8200. And who
| wants to have them in their backend? Worse than Cloudstrike,
| which sounds like CIA to me.
| gnrlst wrote:
| Thought the same until I saw your comment. For those in the
| same boat: Wiz, Inc. is a cloud security startup.
| krembo wrote:
| Fun fact: both founded by Israelis and have their R&D centers
| in the country.
| physicsguy wrote:
| Wonder if it got downvalued during due-dilligence...
| DrScientist wrote:
| I feel like there is an opportunity for a startup that protects
| you from the risks associated with your security vendors :-)
| tzury wrote:
| A screenshot of the internal mail
|
| https://x.com/mikeeisenberg/status/1815644472945819788?s=46
| prng2021 wrote:
| Lina Khan is our modern day superhero. She may be losing most of
| her lawsuits against big tech, but she has clearly struck fear in
| stakeholders on both sides of every tech acquisition.
| RcouF1uZ4gsC wrote:
| I am not quite sure I understand what was in it for Google.
|
| Google already has a world class security team, maybe one of the
| best in software.
|
| What would they gain by this acquisition?
|
| 23 Billion is enough to pay 2000 engineers 1 million USD TC for
| more than 10 years.
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