Security company Wiz is well on its way to an IPO. Before that happens, it wants to achieve $1 billion in annual sales. That goal will be achieved through acquisitions, although they do not always succeed.
Wiz has been in the news rather often lately, and usually for one reason. Its acquisitions are piling up, with Raftt and Gem Security being the most recent incorporations. It does appear that the deal for Lacework is now off the table. However, that is the only interruption in a string of expansions that make Wiz the rising star of the security world.
“Inorganic growth”
For new acquisitions, investments are needed. This Series E round raised $1 billion from the likes of Andreessen Horowitz, Lightspeed Venture Partners and Thrive. This values Wiz at $12 billion, up significantly from $10.3 billion in February 2023. The investments will be put into new talent and R&D investments, according to CEO Asaf Rappaport.
The security market currently consists of more than 3,600 vendors. It seems to be time for consolidation. This has been fueled in part by the fact that venture capital isn’t flooding other security players with investments like they did back in late 2021. In addition, vendors are up for grabs on the cheap. Lacework, which ultimately opted out of a Wiz acquisition, was estimated to have sunk in value by a factor of over 50x when it was to be sold for $150M, having once been valued at $8B.
It presents a prime opportunity for Wiz to grow “inorganically,” as TechCrunch characterizes it. In a way, this consolidation is also necessary to make the security field somewhat manageable for potential customers.
Importance of cloud security
Wiz’s success, however, is no fluke. Cloud security may be a broad spectrum, but this decentrality is precisely why having a clear and unified platform to monitor the entire IT infrastructure is so important. The Wiz suite includes options for everything from workload protection and detection & response to compliance monitoring and Infrastructure-as-Code scanning. This hooks into what customers are looking for, Sarah Wang of Andreessen Horowitz told TechCrunch. “There is nothing that competes directly with Wiz in the area of cloud security,” she said.