The cybersecurity firm Wiz has turned down a $23bn (£18bn) takeover bid from Google’s parent, Alphabet, spurning what would have been the tech company’s biggest ever acquisition and seeking a stock market flotation instead.
Alphabet had been in talks with Wiz, founded by alumni of Israel’s cyberintelligence unit, as it seeks to catch rivals Microsoft and Amazon in the hyper-competitive cloud services market.
Wiz offers a service that scans the data on cloud storage providers such as Amazon Web Services and Microsoft Azure for security risks.
The New York-based startup, which has the backing of investors including Sequoia Capital and Thrive Capital, was most recently valued at $12bn.
“While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” the company told employees in an internal email.
In a memo the Wiz chief executive, Assaf Rappaport, outlined the next targets of reaching $1bn in annual recurring revenue and an initial public offering.
“Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice,” he said. “The market validation we have experienced following this news only reinforces our goal – creating a platform that both security and development teams love.”
Neither Wiz nor Google had released official statements about the termination of the deal talks by Tuesday morning.
There has been scepticism that the deal would pass regulatory scrutiny, as regulators seek to toughen their stance against big tech dealmaking.
In December, Adobe abandoned its $20bn takeover of its smaller rival Figma, after European and UK regulators raised concerns that it would eliminate competition in the product design software market.
Last month, the US Department of Justice and the Federal Trade Commission struck a deal on investigations into the main protagonists in the AI market, including Microsoft, OpenAI and Nvidia.
Wiz, founded in 2020, was valued at $12bn during a funding round in May that drew investors such as Andreessen Horowitz, Lightspeed Venture Partners and Thrive.
Wiz says 40% of Fortune 100 companies are its customers, and that it is making $350m in annual recurring revenue.
