Cybersecurity firm Wiz has rejected a $23bn (£18bn) takeover offer from Google parent Alphabet, snubbing 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 cyber intelligence unit, as it seeks to catch up with rivals Microsoft and Amazon in the hyper-competitive cloud services market.
Wiz offers a service that scans data from cloud storage providers like Amazon Web Services and Microsoft Azure for security risks.
The New York-based startup, which is backed by investors including Sequoia Capital and Thrive Capital, was recently valued at $12 billion.
“While we are flattered by the offers we have received, we have decided to continue on our path toward building Wiz,” the company told employees in an internal email.
In a memo, Wiz CEO Assaf Rappaport outlined upcoming goals of reaching $1 billion in annual recurring revenue and an initial public offering.
“Saying no to such humiliating offers is difficult, but with our exceptional team, I feel confident in making that decision,” he said. “The market validation we’ve experienced following this news only reinforces our goal: to create a platform that both security and development teams love.”
Neither Wiz nor Google had issued official statements regarding the completion of deal negotiations as of Tuesday morning.
There has been skepticism that the deal will pass regulatory scrutiny as regulators look to toughen their stance against big tech takeovers.
In December, Adobe abandoned its $20 billion acquisition of smaller rival Figma after European and UK regulators expressed concerns that it would eliminate competition in the product design software market.
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Last month, the US Department of Justice and the Federal Trade Commission reached a settlement over investigations into major players in the AI market, including Microsoft, OpenAI and Nvidia.
Founded in 2020, Wiz was valued at $12 billion during a funding round in May that attracted investors including Andreessen Horowitz, Lightspeed Venture Partners and Thrive.
Wiz says that 40% of Fortune 100 companies are its customers and that it generates $350 million in annual recurring revenue.