Pablo Srugo says Wiz reached about $500m in ARR in four years, and Google is reportedly in talks to buy it for $23bn, the largest venture-backed startup acquisition ever.
Srugo argues the reported deal implies roughly a 40x revenue multiple in a market no longer hot, versus about 15x for Microsoft and 5x to 10x for Google and Meta.
Srugo credits Wiz's rise to insane growth, insane team and insane discipline, including an end-to-end cloud risk offering that rivals' siloed tools never matched.
Why Wiz reached $500M ARR in four years and drew a $23B bid
Wiz's reported $23B sale to Google would be the largest exit ever for a venture-backed startup, at about 40x revenue. Pablo Srugo attributes it to growth, team and discipline. Wiz solved the full cloud security job where hundreds of vendors each handled a fragment, and a repeat founding team built it on proven customer demand.
Takeaways
The reported $23B price implies an extreme multiple. Google is reportedly in talks to pay $23bn for Wiz, the largest acquisition of a venture-backed startup. On roughly $500M ARR that is about 40x revenue, against about 15x for Microsoft and 5x to 10x for Google or Meta.
Wiz grew at record speed. Wiz announced $100M ARR within 18 months in 2021, the fastest ever at the time and since beaten by ChatGPT. It reached about $300M by end of 2023 and $350M by May 2024.
Wiz won by owning the whole job to be done. Using Christensen's jobs to be done lens, earlier vendors each attacked one silo of cloud security. Wiz covered end-to-end cloud risk, onboarded fast without agents, fit any cloud architecture and helped teams prioritize fixes.
The platform approach resembles Shopify's. Shopify bundled payments, website building and inventory management into one platform. Wiz did likewise for security, replacing hundreds of point vendors, each solving only a piece, with one view of risk.
The founding team was unusually proven. The four cofounders met in the Israeli army at 17 and served together nine years. They built Adallom, which raised $50M and sold to Microsoft for $320M, then spent five years on Microsoft's cloud team.
Customer demand came before product. The founders solved problems manually and showed customers a pitch deck first. Customer assessments exposed risks, such as a virtual machine with access to an external ID, that no siloed tool caught.
Timing and focus amplified the advantage. The CTO brought a Microsoft rule to build nothing that cannot reach over 100m users. Starting in early 2020 gave build time, and Zoom made enterprise selling easier because buyers had time to evaluate.
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