The $32 Billion Security Sale

Published October 11, 2026

In March 2025, Google's parent Alphabet agreed to buy cloud-security startup Wiz for $32 billion in cash — the largest acquisition in Google's history. The deal rewarded Wiz's earliest backers at extraordinary multiples: Cyberstarts' $6.4 million seed investment was worth about $1.3 billion, a return of more than 200 times in five years, while Sequoia's roughly 10% stake could bring about $3 billion and Index Ventures' roughly 12% stake more than $3.8 billion. (Reported by Reuters.)

On March 18, 2025, Alphabet agreed to buy Wiz, a cloud-security company, for $32 billion in cash. Reuters reported that the agreement was the largest acquisition Google had ever made, comfortably ahead of its $12.5 billion purchase of Motorola Mobility in 2011. TechCrunch, which confirmed the deal the same day, noted that the companies expected it to close in 2026, subject to regulatory and other approvals, and that Wiz would join Google Cloud while continuing to operate as a platform that works across all major cloud providers, not only Google's.

Wiz was not an overnight success in the usual sense, but its rise was unusually fast. The company was founded in 2020, and its founding team had previously built another security business that was acquired by Microsoft, according to both Reuters and TechCrunch. Reuters reported that chief executive Assaf Rappaport is a former captain in the Israel Defense Forces. By the time of the Google agreement, TechCrunch's sources put Wiz at about $700 million in annual recurring revenue and on course to reach $1 billion, figures that help explain why a five-year-old company could command such a price.

The path to $32 billion included saying no to a very large offer first. In 2024, Google proposed buying Wiz for $23 billion, at a time when Wiz had recently been valued at $12 billion in a $1 billion funding round. Those talks fell apart, and Wiz later ran a secondary sale that valued it at $16 billion. When Google returned with $32 billion, the price was roughly double that secondary valuation and substantially above the offer Wiz had walked away from. On purely financial terms, waiting had paid off — although that outcome was only clear in hindsight.

The clearest windfalls belonged to the investors who backed Wiz at the beginning. Reuters reported that about 25 firms sat on Wiz's cap table. Cyberstarts, an Israel-based early-stage firm, co-led a $21 million seed round in February 2020 that valued Wiz at about $67 million after the money was invested. A $6.4 million investment from Cyberstarts' first seed fund was worth about $1.3 billion under the Google deal, a return of more than 200 times in about five years. Sequoia, which first put in $10 million in the seed round and invested more later, held roughly 10% and could receive about $3 billion. Index Ventures, described by Reuters as the largest shareholder with about 12%, could receive more than $3.8 billion.

Later investors did well too, on a different scale. Reuters reported that Cyberstarts' Opportunity Fund turned a $40 million investment made in 2024 into $128 million, and that Thrive Capital held a stake worth about $1 billion after leading Wiz's two most recent funding rounds, at valuations of $12 billion and $16 billion. TechCrunch added a separate employee dimension: a source described a further $1 billion in retention bonuses on top of the purchase price, spread among about 1,700 employees at the time — an average of more than $588,000 per person, with actual amounts varying widely by role and tenure.

Reuters framed the deal as a rare large exit in a period when high interest rates and close antitrust scrutiny had made such outcomes harder to achieve. For Google, TechCrunch reported, the appeal was twofold: strengthening its enterprise cloud business, where it trails larger rivals, and adding a fast-growing security business at a moment when cloud adoption and artificial intelligence were changing how organizations need to defend themselves. That strategic need is part of why the price could rise so far above the value placed on Wiz only a year earlier.

None of this makes the outcome a formula. Venture returns follow a power law, as Reuters noted: a small number of investments produce most of the gains, and the same early-stage risk that produced a 200-times return here produces losses elsewhere that never make headlines. What Wiz shows, plainly, is the arithmetic of getting in before the value is obvious — and of a founding team that was willing to decline $23 billion because it believed, correctly in this case, that its business was still compounding. Early conviction only becomes a windfall when it survives long enough to reach an exit, and survivorship is the part no investor can schedule.

The lesson: Early conviction only becomes a windfall at an exit — Wiz's backers held through a rejected $23 billion offer to reach $32 billion.

Source: original reporting · How we source stories