Wiz Hits $12B Valuation, Eyes IPO with $350M ARR

Key Takeaway

• Wiz's latest $1 billion funding round, led by top investors, boosts its valuation to $12 billion and total funding to $1.9 billion.
• The company plans strategic acquisitions and product development, aiming for market consolidation ahead of a potential IPO.
• Achieving $350 million in ARR in 2023, Wiz targets a future IPO with a focus on innovation and customer value over immediate public listing.

Record Funding Round

Wiz, a rapidly growing cloud security startup, announced on Tuesday that it has raised $1 billion in a new funding round, bringing its total funding to $1.9 billion. This round was led by prominent investors including Andreessen Horowitz, Lightspeed Venture Partners, and Thrive Capital, with participation from Greylock Partners, Wellington Management, and existing investors such as Cyberstarts, Greenoaks, Index Ventures, Salesforce Ventures, Sequoia Capital, and former Starbucks CEO Howard Schultz. This investment propels Wiz's valuation to $12 billion, marking a significant milestone in the company's journey.

Strategic Acquisitions and Growth

The company, under the leadership of co-founder and CEO Assaf Rappaport, is positioning itself for a year of consolidation in the cybersecurity sector in 2024. Wiz plans to utilize the funds from this round for acquisitions, product development, and talent acquisition. Recently, Wiz acquired Gem Security, a cloud detection and response company, and signed a letter of intent to acquire cybersecurity startup Lacework. However, Wiz is currently reassessing the value of its offer for Lacework after a period of due diligence. These strategic moves are part of Wiz's broader ambition to expand its market share and venture into new territories.

Financial Performance and IPO Considerations

Wiz has demonstrated remarkable financial performance, achieving $100 million in annual recurring revenue (ARR) within 18 months of operation and reaching $350 million in ARR in 2023. This financial success positions Wiz as a strong candidate for an initial public offering (IPO), although the company indicates no rush to go public. "Regarding a potential IPO, we are not rushing into it—we have previously indicated that we would move ahead once we reach $1 billion ARR. For now, we intend to continue innovating and providing maximum value to our customers," stated Rappaport. This approach reflects Wiz's focus on innovation and customer value over immediate public market entry.

Expanding Market Presence

Wiz's technology is currently utilized by hundreds of organizations worldwide, including more than 40 of the Fortune 100 companies. The company's founders, who previously sold their first startup Adallom to Microsoft, launched Wiz in 2020 with a vision to address a broad spectrum of cybersecurity challenges in cloud environments. This includes securing customer code bases, engineering departments, identity management, artificial intelligence, and data clouds. Wiz's platform aims to provide comprehensive security solutions that cover the entire supply chain of cloud security, emphasizing the importance of understanding and addressing vulnerabilities effectively.

Management Quotes

• Assaf Rappaport, CEO of Wiz:

  "Regarding a potential IPO, we are not rushing into it—we have previously indicated that we would move ahead once we reach $1 billion ARR. For now, we intend to continue innovating and providing maximum value to our customers." "Our primary goal remains expanding our market share and expanding into new territories, as there’s a huge market opportunity awaiting—and the time for seizing this opportunity is now."

• Ami Luttwak, CTO of Wiz:

  "If you start breaking it out, you understand that in order to provide a platform that provides security for the cloud, you actually cover the entire supply chain of building this up." "The idea is to provide customers with enough context to understand which problems and vulnerabilities to address and when."