Wiz, a buzzy startup building an all-in-one cloud security platform, is making acquisitions to quickly scale toward an IPO.
And now, it has completed a major $1 billion funding round to support its march.
A Series E co-led by Andreessen Horowitz, Lightspeed Venture Partners, and Thrive values Wiz at $12 billion, making it one of the most valued startups in cybersecurity today.
This is a notable improvement from Wiz's last raise, when it closed a $300 million round with $10.3 billion post-money in February 2023. When rumors of this latest funding hit the market in March, the amount was pegged at $800 million. The fact that Series E is currently priced at $1 billion speaks to how hot the activity is around Wiz right now. “Iconic” was the word one investor used to describe the company when speaking to TechCrunch.
(The company acknowledged that the Series E also includes a small secondary component.) A person close to the deal said the amount is about $30 million to $40 million, or “tens of millions of dollars.” )
Wiz co-founder and CEO Assaf Rappaport said in an interview that Wiz plans to continue growing the platform organically by hiring more talent and investing in research and development. . But while there are countless cybersecurity startups out there today, the New York startup sees a unique opportunity to grow inorganically through acquisition and bring in customers, talent, and technology more quickly.
“I think there are two types of opportunities in the market right now,” he said. “There are also former unicorns, startups that have raised significant amounts of capital at valuations above $1 billion, but have not been able to grow as expected and are now exploring options other than an IPO.” And exciting. There are young start-ups and superstars with amazing trajectories. before them. We now have an opportunity to join forces with both. ”
Due to the size of this round, Wiz has a lot of room to make a cash acquisition, which would mean giving up a stake in Wiz itself, a nod to the company's future intentions to go public.
The funding comes at a time when Wiz is already building a small company. Just a month ago, the company acquired Gem Security for $350 million. The company today explains that Rapaport falls into the latter “exciting and young” category. Just a few weeks later, Wiz signed a letter of intent to acquire Lacework, a startup once valued at $8.3 billion, for just $168 million. (This would be an “ex-unicorn,” in Rappaport's terminology.) The latter deal did not go through, but during due diligence, interest and purchasing funds were not enough to win the deal. I now understand that it was a reminder of what I don't have. line.
The company has a long list of companies to choose from. By one estimate, there are currently 62 cybersecurity startups whose last raised valuation exceeded $1 billion. This list includes Aqua and Orca. These are not related to each other, but they work together. Also included are Netskope, Snyk, Arctic Wolf, Axonius, and more. In small cases, the number can be in the hundreds. All of these compete with much larger players in the market, including Palo Alto Networks, CrowdStrike, and others.
Wiz was founded just four years ago by Rappaport and his co-founders Ami Luttwak, Yinon Costica, and Roy Reznik (all of whom previously worked at Microsoft and have past experience building startups and exits). have been successful). The company claims to have contracts with about 40% of the Fortune 100, with its biggest customers including BMW, Colgate-Palmolive, and strategic investors Salesforce and Mars.
Together, the businesses have ARR of $350 million. This is still far from the $1 billion ARR target by the end of 2025. But that goal is another reason why the company is looking to grow through acquisitions.
Wiz's traction in the market is partly due to the sector it targets and partly due to its approach.
Businesses have invested heavily in cloud services to speed up operations and make IT more flexible, but these changes have made network and data architectures more complex and expanded attack surfaces. Your organization's security profile has changed significantly. , creating an opportunity for malicious hackers to find a way to penetrate these systems.
Wiz has stood out in a crowded market by taking an all-in-one platform approach. Wiz ingests data from AWS, Azure, Google Cloud, and other cloud environments and scans applications, data, and network processes to discover security risk factors, understand where those risks exist, and remediate them. Provide users with various detailed views to understand how. The company's platform currently covers around 13 different areas, ranging from code security, container environment security, and supply chain security, around which it has integrated and partnered with many other startups to create an ecosystem (and adaptability for customers).
Philip Clark, who leads investments at Thrive Capital, describes AI as part of the “next wave of security issues,” and Wiz is also expanding its activities, particularly in AI security posture management.
“It's about meeting the needs of our customers,” Sarah Wang, general partner at a16z, told TechCrunch. She said, “She has no direct competition with Wiz in the field of cloud security.”
In the meantime, more opportunities abound. When I spoke with Rappaport for this article on Monday, he had just arrived in San Francisco to attend his RSA security conference. There he plans to have nearly 600 companies exhibiting, so it's a great opportunity to shop.
In addition to Greylock and Wellington Management, the funding also includes participation from previous backers Cyberstarts, Greenoaks, Howard Schultz, Index Ventures, Salesforce Ventures, and Sequoia Capital, bringing the total amount raised by Wiz to $19. It will be a billion dollars.
The long list of big-name backers added to the list that Rapaport announced he rejected all confirm investor interest in the company at this point.
“Wiz is nothing short of a rocket ship,” another investor, Arsham Mehmalzadeh of Lightspeed, said in a statement.