Why Wiz Is Pursuing Its 2nd Massive Funding Round in 2 Years – Source: www.databreachtoday.com

Cloud Security
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Security Operations

Cloud Security Vendor Wiz Eyes Unprecedented $800M Funding Round at $10B+ Valuation

Michael Novinson
(MichaelNovinson)

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March 11, 2024    

Just a year after becoming the world’s most valuable venture-backed cybersecurity company, Wiz is back at it again.

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The New York-based cloud security phenom is speaking with several investors including Thrive, Lightspeed Venture Partners, G Squared, Sequoia and Cyberstarts in hopes of raising roughly $800 million at a valuation of more than $10 billion, the Financial Times reported Friday. The cash infusion would help Wiz finance future acquisitions of other tech groups to bolster its offering, the Financial Times reported.

Terms of the financing haven’t been finalized and details could still shift or breakdown, the Financial Times said. Wiz declined an Information Security Media Group request for comment. The talks come a year after Wiz closed a $300 million Series D funding round at a $10 billion valuation to protect more complex cloud environments and keep pace with increased corporate data moving to the cloud (see: Wiz Raises $300M on $10B Valuation to Safeguard Cloud Data).

Wiz made its first-ever deal in December, scooping up cloud-based development platform Raftt for as much as $50 million, Bloomberg said at the time. The firm has pursued much bigger fish, with Wiz telling ISMG in August it “has openly discussed the possibility of acquisition” and has followed SentinelOne’s “growth journey for the past several years,” given the company’s “strong cybersecurity offering.”

But SentinelOne CEO Tomer Weingarten firmly shot down those reports, calling them in August “a head-scratcher,” “far from fact” and “pure speculation on their part.” Still, Wiz has an enormous war chest given the $900 million of outside funding the company has received since its founding. An $800 million windfall would be 60% larger that the largest cybersecurity round in all of 2023, which went to Sandbox AQ (see: SentinelOne CEO on Wiz M&A: ‘Pure Speculation on Their Part’).

How Wiz Stacks Up to the Competition

Despite being only four years old, Wiz already has capabilities around cloud workload protection, data and cloud security posture management, supply chain security, vulnerability management, AI security posture management, code security, cloud detection and response, cloud infrastructure entitlement management, and infrastructure as code scanning, according to IT-Harvest.

Forrester in January ranked Wiz’s cloud workload security capabilities fourth-best in the industry behind only CrowdStrike, Palo Alto Networks and Microsoft. The analyst firm praised Wiz for its agentless cloud workload protection, compliance template mapping, CIEM and container orchestrator protections. But Forrester said Wiz lags peers in admin user IAM, reporting and auditing, and agent-based CWP adoption.

Wiz, founded in Tel Aviv by the creators of cloud access security broker Adallom, has more than $350 million of annual recurring revenue. Last month, Dali Rajic made a lateral move from the chief operating officer position at Zscaler – which at the time had a $34 billion market cap – to the same role at Wiz, which is far smaller. As of last month, Wiz had 900 employees and plans to add 400 staff members this year (see: Wiz Snags Zscaler COO Dali Rajic).

The company has also pursued geographic expansion as it grows in size, with Wiz announcing last year it would open new offices in Dallas, Austin and Washington, D.C., to help the U.S. government secure the nation from cyberattacks. More than 40% of the Fortune 100 are customers of Wiz, including notable clients such as BMW, Merrill Lynch, Morgan Stanley, Salesforce, Slack, Colgate and Blackstone.

A valuation in excess of $10 billion would make Wiz worth more than all but seven publicly traded pure-play cybersecurity vendors. Only Palo Alto Networks, Fortinet, CrowdStrike, Zscaler, Check Point, Gen Digital and Okta have a valuation exceeding Wiz’s.

With an unprecedented growth rate and an additional $800 million in its pocket, it’s only a matter of time before Wiz catches some of the other names on that list. Whether Wiz will be venture-backed or publicly traded when it does remains unclear.

Like the rest of us, Wiz will be closely watching the markets.