Assaf Rappaport, the co-founder and CEO of cloud security startup Wiz, said that turning down a $23 billion offer from Google was “the toughest decision ever,” but justified it by saying the company can get even bigger and reach $100 billion because cloud security is the future.
“I think we did the right choice,” Rappaport said on Monday at the annual TechCrunch Disrupt conference.
“We believe it’s bigger, definitely bigger than endpoint, bigger than networks, so the opportunity to become a 100 plus billion dollar company is there. We believe that the company that is going to…own cloud security in the world is going to be a 100-plus billion dollar company,” he added. “I’m not sure it’s going to be Wiz, but if we do the right things, and we execute, I think it’s…in our hands.”
Even then, it was not an easy decision to make, as he had to think about Wiz’s investors, as well as its employees.
“I was super nervous,” he admitted. But it was he and his co-founders who made that call. “At a healthy company with a healthy relationship with investors, it’s always the founder’s decision.”
At the time Wiz turned down the $23 billion offer from Alphabet, Google’s parent company, the four-year-old startup founded by former Israeli military officers had a private valuation of $12 billion. It had raised $1 billion from investors led by Andreessen Horowitz, Lightspeed Venture Partners, and Thrive Capital. After that cash infusion, the company called itself “the world’s largest cybersecurity unicorn.”
“Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice,” Rappaport said in an email to Wiz’s employees at the time, according to TechCrunch.
Wiz has been one of the fastest-growing cybersecurity startups in recent years. This month, the company hit $500 million in annual recurring revenue, and hopes to double that to $1 billion in 2025, according to Roy Reznik, Wiz’s co-founder and VP of R&. Reznik argued that hitting that goal is a prerequisite for an IPO, which the company promised its employees after turning down Google’s offer.
When asked about Wiz’s M&A strategy, Rappaport said that even though the company made two acquisitions in the last year — startups Gem and Rafft — in general, the company is risk-averse.
“Having the money doesn’t mean that you need to be active,” Rappaport said. “We’re a 1,500 people organization, so almost every acquisition is a tremendous culture that’s coming and might affect [Wiz’s culture.]”