Wiz CEO Assaf Rappaport and Alphabet CEO Sundar Pichai.
To the optimists, it is a masterstroke, a decisive move by Google to secure its footing in the AI-driven cloud wars, finally answering the dominance of AWS and Azure. To the skeptics, it is a desperate overpayment, a textbook example of the "Winner's Curse" where the prize of winning the auction comes at the cost of potentially destroying the asset, and the shareholder value.
The Context
Wiz is more than just a successful startup. It is a phenomenon. Founded in 2020 by Assaf Rappaport and his team of former Microsoft executives (the same unit that built Adallom, acquired by Microsoft for $320 million), Wiz grew to $350 million in annual recurring revenue (ARR) by February 2024, $500 million by March 2025, with analysts forecasting $640–800 million in revenue for the coming year.
Their secret sauce was not just their AI-native scanning technology, but their architectural neutrality. By sitting agnostically between AWS, Azure, and Google Cloud, Wiz became the "Switzerland" of cloud security, trusted by 40% of the Fortune 100 precisely because it favoured no single sovereign.
Talks started in May 2024 but collapsed in July 2024, when Wiz famously rejected Google’s $23 billion offer to pursue an IPO. At the time, the regulatory "chilling effect" of the Biden administration’s FTC and antitrust concerns made the deal untenable. However, the window reopened in early 2025. With the Trump administration signalling a return to a more permissive M&A environment, the brakes came off. What followed was a frenzy. The renewed auction drew interest not just from strategic giants (e.g. Microsoft), but from private equity powerhouses (e.g. Thoma Bravo and Blackstone), creating a high-pressure competitive tunnel.
Alphabet emerged as the victor, but the cost of victory was steep. By returning to the table, Google paid $32 billion, a $9 billion premium over the price Wiz rejected just eight months prior. This represents a staggering 40-50x forward revenue multiple (64x trailing), a figure that defies traditional financial gravity and implies the price was driven not by fundamentals, but by the sheer scarcity of the asset and Google's desperation to deploy capital in the AI era.
Strategic Rationale vs. Day-to-Day Reality
Strategically, the logic is seductive, and one can argue that this is the only logical move for Alphabet. Google Cloud Platform (GCP) has long trailed AWS and Azure in security perception. While Google owns Mandiant (world-class incident response, acquired for $5.4 billion), it lacked a dominant prevention engine. Wiz’s "Agentless Scanning" technology allows it to instantly map a customer’s entire cloud estate (including AWS and Azure workloads) without installing friction-heavy software.
With Wiz, Google instantly buys credibility and fills a critical void. This move enables Google to pivot to become the dashboard for every enterprise’s multi-cloud and AI security strategy, a stack that Thomas Kurian (Google Cloud’s CEO) desperately needs to close the market share gap. Google is also acquiring a team of elite Israeli cybersecurity architects who operate with a speed Google’s own bureaucracy has long lost, according to contacts in the industry.
However, we can also point to the graveyard of similar deals. Wiz’s commercial strength has been its vendor neutrality. That neutrality evaporates the moment it becomes a Google subsidiary. Will AWS and Azure customers continue to trust a security layer owned by their fiercest competitor? This "Switzerland Paradox" is a critical risk. If customers view Wiz as a Trojan Horse for Google Cloud, the revenue stream is in danger.
Furthermore, there is the question of "Organizational Rejection." Can a flat, hyper-agile startup survive inside the layered hierarchy of Mountain View? The comparison to Mandiant (acquired by Google for $5.4 billion in 2022) is haunting, despite initial retention incentives, the slow erosion of talent and speed became inevitable once the lock-up periods expired and the mission was subsumed by the machine. Alphabet CEO Sundar Pichai's explicit promise to maintain Wiz's independence (backed by a reported $3.2 billion break-up fee structure) suggests Google is aware of the risk, aiming to preserve the agility that made Wiz valuable. But awareness does not guarantee execution.
The Danger of the High Multiple
While the market debates strategy, I believe the real danger lies in the structure of the transaction itself.
Wiz was acquired on a 40-50x forward revenue multiple. When a buyer pays such an extreme multiple, they remove their own margin for error. To justify a $32 billion price tag to shareholders, Alphabet cannot simply let Wiz "be," despite legal agreements. The financial gravity of the deal will inevitably force them to seek massive, immediate synergies.
The standard M&A Playbook led investment bankers to organise a bidding war that inflated the price. Now, to justify that price, Google will be pressured to integrate Wiz aggressively. Cross-selling to Google customers and merging back-ends will be the easy part. The real challenge is preserving Wiz's flat, rapid-iteration culture inside Alphabet's hierarchy. The auction's victory could become a slow erosion of the very capabilities that justified the premium. This is where the "M&A Paradox" strikes. Google won the dream company, but the integration will likely be a nightmare, for all parties.
Reflections for Business Leaders
This deal underscores live tensions in the 2025-2026 M&A landscape: High multiples reward optimism but amplify integration challenges.
Independence promises and retention incentives show awareness of the issue, but disagreements on neutrality and scale highlight potential oversights in standard M&A processes. The 40-50x multiple, for instance, is so irrational that it signals a process overly focused on price rather than fit.
For buyers, winning the auction is not winning the game. If your M&A process does not measure the "Muscle" (culture) as accurately as the "Fat" (costs), you will inevitably cut the wrong things.
For sellers, an irrational valuation is often a "Poisoned Check." It looks like victory, but it frequently leads to the dismantling of your legacy as the buyer scrambles to recoup their overpayment. Prioritize bidders who demonstrate cultural understanding. But even here, awareness is not enough. A record multiple like this is totally irrational if the process ignores intangibles.
For all business leaders watching this unfold: The lesson is not about cloud security, but about Stewardship.
The Wiz deal is a reminder that the highest bidder is not always the best steward. A process designed solely to maximize the exit price maximizes the risk of post-closing destruction. True responsible M&A requires resisting the tunnel vision of the auction. It demands a process that values the intangibles of the company as highly as its revenue stream. Because in the end, if you buy the asset but kill the organization, you have bought, and sold, nothing of value.
Time will tell if Alphabet can defy the odds, but the structural forces of the standard M&A playbook are already working against them.
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Amine Laouedj Managing Director, Glenshore
I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.
Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation.