Wiz, one of the most talked about companies in the world of cybersecurity, is making major acquisitions to expand its product range in cloud security, especially for developers. It will acquire Dazz, a specialist in security remediation and risk management. The deal is worth $450 million in cash and stock, sources said.
This is the start of the startup's last round of funding. In July, we reported that Dazz had raised $50 million at a post-money valuation of just under $400 million.
Remediation and posture management (two areas of focus for Dazz) are key services in the cybersecurity market, but they weren't covered as much as Wiz had hoped.
“Dazz is the leader in this market, has the best people, the best customers, and is a great cultural fit,” Wiz CEO Assaf Rappaport said in an interview.
Remediation refers to helping understand and resolve vulnerabilities, and it embodies how businesses actually respond to the many vulnerability alerts they may receive from across their networks. Posture management is a more proactive product. This allows organizations to better understand the size, shape, and capabilities of their networks in terms of building better security services around them.
Dazz continues to operate as a separate entity while being integrated into the larger Wiz stack. Wiz has built a reputation as a “one-stop shop,” and Rappaport said integrated services will continue to be a key part of that.
He believes this is in contrast to the way many other SaaS businesses are built. Rapaport said the security industry is “full of Frankenstein mashups where companies prioritize revenue over building a single technology stack that actually functions as a platform.” There is no doubt that integration is even more important in cybersecurity than in other areas of enterprise IT.
long and close partnership
Wiz and Daz had already developed a close relationship prior to this agreement. Merav Bahat is the CEO who co-founded Daz with Tomer Schwartz and Yuval Ofir (chief technology officer and vice president of research and development, respectively) and his previous startup, Adalom. He worked closely with Assaf Rappaport of acquired Microsoft.
Rapaport has left, joining Adalom's past co-founders Chief Technology Officer Ami Luttwak, VP of Product Ynon Kostica, and VP of Research and Development Roy Reznik at Wiz After founding the company, Mr. Bahat became one of its first investors. Similarly, when Bahat launched Dazz, Assaf was a small investor in it.
The connection is deeper than that of co-workers. Bahat and Rapaport were also close friends, and she was a second family to Rapaport's dog Mika, known as Wiz's chief dog officer (complete with LinkedIn profile). As the deal was finalized, the two faced a very sad development. Bahat's mother and Mika died.
“We are looking forward to a positive new chapter here,” Bahat said. The cycle of life will certainly continue.
Rumors about the acquisition began surfacing earlier this month. Rappaport admitted that that's when they started talking seriously.
However, this is not the only topic regarding M&A that Wiz has been involved in. Earlier this year, Google tried to buy Wiz itself for $23 billion to build a significant cybersecurity business. Wiz pulled out of what would have been Google's biggest deal, in part because Rappaport said he believed Wiz could become an even bigger company on its own terms. That was it. And that's what we're aiming for with this deal.
The acquisition is one of several financings for Wiz, which had $1 billion in its coffers explicitly for M&A purposes earlier this year (it has raised nearly $2 billion in total, with more coming in the coming weeks). I hear another round will be completed within the next few days). . While there was another deal to buy Gem Security for $350 million, this is Dazz's largest acquisition to date.
M&A may continue to increase in the future. “We believe next year will be an acquisition year for us,” Rappaport said.
Developers need more help
Luttwak said in an interview with TC that one of Wiz's priorities right now is building more tools to address what developers need to get their jobs done.
Businesses have invested heavily in cloud services to speed up operations and make IT more flexible, but that shift has also significantly changed the security profile of organizations. Network and data architectures have become more complex, and the attack surface has expanded further. , creating an opportunity for malicious hackers to find a way to penetrate these systems. AI is making all of this significantly more difficult for malicious attackers. (This is also an opportunity: A new generation of tools to protect us are all built on AI.)
Wiz's unique selling point is its all-in-one approach. Wiz ingests data from AWS, Azure, Google Cloud, and other cloud environments and provides a wide range of tools to scan applications, data, and network processes to detect security risk factors and understand where those risks exist. Provides a detailed view to the user. This includes areas such as code security, container environment security, and supply chain security, as well as a number of partner integrations to work with other providers (or incorporate functionality not directly provided by Wiz).
Sure, Wiz has provided some improvement in prioritizing and fixing issues, but as Luttwak said, Dazz's product is better.
“We now have a platform that allows us to really have a 360-degree view of the risks that cover our infrastructure and applications,” he said. “Dazz is a leader in attack surface posture management, the ability to collect vulnerability signals from application layers across the stack and build the best context for engineers to track and help remediate.”
On the Dazz side, when I interviewed Bahat in July 2024 when Dazz raised $50 million at a $350 million valuation, she extolled the virtues of building strongpoint solutions: He called the third quarter “great” this week.
“But market forces are what drives these kinds of deals,” she says. She admitted that Daz had received acquisition offers from other companies. “When we think about our customers and our joint customers with Wiz, it makes sense to bring Wiz together on one platform.”
And some of Dazz's competitors are still going it alone. Just yesterday, Cyera, an attack surface management specialist like Dazz, announced a $300 million increase to its $5 billion valuation (confirming our scoop). But what will you do with that money? Of course we will make acquisitions.
Wiz says the company currently has $500 million in annual recurring revenue (it's aiming for $1 billion in ARR next year) and counts more than 45% of Fortune 100 companies as customers. According to Dazz, ARR has reached tens of millions of dollars and is currently experiencing 500% growth with a customer base of approximately 100 organizations.