Wiz, one of the most talked-about names in the world of cybersecurity, is making a significant acquisition to expand its product reach in cloud security, particularly with developers. It is buying Dazz, a specialist in security remediation and risk management. Sources tell us the deal is valued at $450 million in a mix of cash and shares.
This is a bump on the startup’s last funding round. In July, we reported that Dazz raised $50 million on a post-money valuation of just under $400 million.
Remediation and posture management — the two areas where Dazz focuses — are key services in the cybersecurity market that Wiz was not covering as well as it wanted to.
“Dazz is the leader in this market, with the best talent and the best customers, and it’s a great culture fit,” said Assaf Rappaport, Wiz’s CEO, in an interview.
Remediation, which refers to helping to understand and resolve vulnerabilities, gives shape to how an enterprise actually tackles the many vulnerability alerts they might receive from across their networks. Posture management is a more preemptive product: it gives an organization a better understanding of the size, shape and function of its network from the perspective to build better security services around that.
Dazz will continue to operate as a separate entity while it’s integrated into the larger Wiz stack. Wiz has built a name for itself as a “one-stop-shop”, and Rappaport said that an integrated offering will continue to be a major part of that.
He believes that is in contrast with how a lot of other SaaS businesses have been built. In the security industry, there are, Rappaport said, “a lot of Frankenstein mashups, where companies are prioritizing revenues over building one technology stack that actually works as a platform.” Arguably, integration is even more important in cybersecurity than in other areas of enterprise IT.
A long and close partnership
Wiz and Dazz already had a close relationship going into this deal. Merav Bahat — the CEO who co-founded Dazz with Tomer Schwartz and Yuval Ofir (CTO and VP R&D, respectively) — worked closely with Assaf Rappaport at Microsoft, which acquired his previous startup Adallom.
After Rappaport left to found Wiz with his past Adallom co-founders CTO Ami Luttwak, VP Product Yinon Costica, and VP R&D Roy Reznik, Bahat was one of its first investors. Similarly, when Bahat started Dazz, Assaf was a small investor in that.
The connection goes deeper than work colleagues. Bahat and Rappaport are also close friends, and she was a second family to Mika, Rappaport’s beloved dog who was known as Wiz’s Chief Dog Officer (complete with LinkedIn profile). As the deal went down, the two faced two very sad developments: both Bahat’s mother and Mika passed away.
“We’re hoping for a new chapter of positivity here,” Bahat said. The cycle of life indeed continues onward.
Rumors about this acquisition started to surface earlier this month; Rappaport confirmed that this was when they had started to talk seriously.
But that’s not the only M&A chatter that has involved Wiz. Earlier this year, Google tried to buy Wiz itself for $23 billion to build a significant cybersecurity business. Wiz walked away from the deal, which would have been Google’s biggest, partly because Rappaport said he believed Wiz could become an even bigger company on its own terms. And is what it is aiming for with this deal.
The acquisition is one of a run for Wiz, which earlier this year filled its coffers with $1 billion expressly for the purpose of M&A (it’s raised nearly $2 billion in total, and we’ve heard that another round will close in several more weeks). Other deals have included buying Gem Security for $350 million, but Dazz is its biggest acquisition yet.
There may be more M&A to come. “We believe that next year is going to be a year of acquisitions for us,” Rappaport said.
Developers need more help
Speaking to TC, Luttwak said that one of the priorities for Wiz right now is to build out more tools for developers, addressing what they need to get their jobs done.
Enterprises have made significant investments into cloud services to speed up how they work and to make their IT more flexible, but that shift has come with a significantly changed security profile for those organizations: Network and data architectures are more complicated, and attack surfaces are larger, creating opportunities for malicious hackers to find ways to breach those systems. AI is making all of that significantly more challenging in terms of malicious attackers. (It’s also an opportunity: a new generation of tools to defend us are all built on AI.)
Wiz’s unique selling point has been an all-in-one approach. Ingesting data from AWS, Azure, Google Cloud and other cloud environments, Wiz scans applications, data and network processes for security risk factors and provides a range of detailed views to its users to understand where those risks exist, with more than a dozen products covering areas like code security, container environment security and supply chain security, as well as a number partner integrations for those working with other providers (or to incorporate functions that Wiz does not offer directly).
Indeed, Wiz offered a degree of remediation to help prioritise and fix issues, but as Luttwak said, Dazz’s product is just better.
“We now have a platform that can actually give you a 360-degree view of risk, covering infrastructure and application,” he said. “Dazz is the leader in attack surface posture management, the ability to collect vulnerability signals from the application layer across the stack, and build the most amazing context that allows you to track it back to the engineers, to help with remediation.”
On the side of Dazz, when I interviewed Bahat in July 2024, when Dazz raised $50 million on a $350 million valuation, she extolled the virtues of building a strong point solution and this week, she said that Q3 was “amazing.”
“But the momentum in the market is something that ignites these kind of deals,” she said. Dazz had been getting acquisition offers from other companies, too, she confirmed. “If you think about the customers and the joint customers that we have with Wiz, it makes sense for them to have it in one platform.”
And some of Dazz’s competitors are still going it alone: Cyera, like Dazz an expert in attack surface management, just yesterday announced a $300 million raise on a $5 billion valuation (confirming a scoop of ours). But what is it going to do with that money? Make acquisitions, of course.
Wiz says it is now at $500 million in annual recurring revenues (it’s aiming for $1B in ARR in the next year), and counts over 45% of the Fortune 100 as customers. Dazz said that ARR was in the tens of millions of dollars and it is currently growing at 500% on a customer base of about 100 organizations.