Alphabet Inc., the parent company of Google LLC, is reportedly in advanced talks to acquire Israeli cloud security firm Wiz Inc. for about $23 billion.

The Wall Street Journal, citing people familiar with the matter, claims that the final deal could happen soon if existing talks do not fall apart. The deal, should it happen, would be Alphabet’s and Google’s largest acquisition on record.

Alphabet is said to be eyeing Wiz to help boost its efforts in cloud computing. Google, through Google Cloud, has long been stuck in third place behind Amazon Web Services Inc. and Microsoft Corp.’s Azure. The idea is that Wiz’s service would enhance what Google has to offer against AWS and Azure.

Wiz was founded in 2020 by Assaf Rappaport, Ami Luttwak, Yinon Costica and Roy Reznik (pictured), former leads of Microsoft’s Cloud Security Group and the founding team of Adallo Inc., a cybersecurity startup acquired by Microsoft for $320 million in 2015.

The company offers a software platform that helps companies detect vulnerabilities and malicious activity in their cloud setup across network, identity, compute, application and secrets. It presents all the information in one place at any scale to deliver quicker insights and informed decision-making.

Wiz’s platform ranks vulnerabilities through a risk-weighted view, allowing users to assess vulnerabilities and misconfigurations based on severity, exposure, exploitability, blast radius and business impact. Wiz’s platform provides support for AWS, Azure, Google Cloud Platform and Kubernetes application programming interfaces.

The company was last in the news in May when it raised $1 billion on a $12 billion valuation in a round that was led by Andreessen Horowitz, Lightspeed Venture LLC and Thrive Capital Management LLC.

Wiz has also been a keen acquirer of smaller companies, having acquired fellow Israeli cybersecurity startup Raftt for $40 million to $50 million in December and Gem Security Inc., a cloud security startup, for a reported $350 million in April. On April 18, Wiz was also reportedly in talks to acquire rival cloud security startup Lacework Inc. for about $150 million to $200 million.

Coming into its potential acquisition, Wiz reportedly hit $350 million in annual recurring revenue in 2023.

The news comes less than a week after it was reported that Alphabet has abandoned plans to acquire marketing software firm HubSpot Inc. Reports that Alphabet was interested in HubSpot first emerged in April, with a report in May saying that terms of a deal were under discussion but ultimately, the two companies couldn’t agree on a figure.

Given Wiz’s valuation of $12 billion in May, if the Journal’s report is correct and Alphabet is willing to spend $23 billion on Wiz, in theory the odds of a deal happening are high. However, as the HubSpot talks show, even with the best of intentions, deals aren’t final until both companies sign on the dotted line.

“It would likely face typical regulatory approval process, but we’d expect the deal would be well positioned for approval given GOOG’s emerging security offering and Wiz’s relative size to competitors,” analyst John Blackledge of TD Cowen told clients in a note.

The deal would be one of the largest tech acquisitions of the year so far, behind Cisco Systems Inc.’s $28 billion takeover of Splunk Inc. in March and Synopsys Inc.’s acquisition of Ansys Corp. for $35 billion in January.

Photo: Wiz