Google’s $32 billion Wiz deal may signal a turning point for slow IPO, M&A markets
Assaf Rappaport, Wiz, on Centre Stage during day one of Web Summit 2021 at the Altice Arena in Lisbon, Portugal.
Harry Murphy | Sportsfile | Getty Images
Google’s acquisition of cybersecurity startup Wiz could be a turning point for an uncertain IPO market and a mergers and acquisitions environment aching from a slowdown in deal activity.
Alphabet announced Tuesday that it plans to buy the Israeli cybersecurity startup for $32 billion in its biggest acquisition ever. The deal came months after an initial $23 billion offer fell through and Wiz CEO Assaf Rappaport touted plans for an initial public offering.
While deal activity has slowed from its 2021 heyday, appetite has begun to pick up.
SailPoint went public in February and CoreWeave, which sells Nvidia’s AI processors, said in a Thursday filing that it plans to raise up to $2.7 billion in its IPO that’s expected this week. Ticket vendor StubHub filed for an IPO Friday.
Wiz’s blockbuster deal could signal the opening of the floodgates for the IPO and M&A markets.
Cybersecurity companies look particularly poised to win as companies hunt for ways to shield their highly profitable business models. CB Insights on Tuesday said cybersecurity solutions are one of the top acquisition target areas for 2025.
“Having a more complete offering for securing workloads in the cloud — that’s the core, the rationale behind [the Wiz] deal,” said Merritt Maxim, Forrester vice president and research director.
AI driving demand for more cybersecurity
The proliferation of artificial intelligence and the transition to the cloud has amplified the need for cybersecurity solutions.
More adept hacking schemes have accelerated since OpenAI’s launch of ChatGPT in late 2022, expediting the need for cutting-edge solutions to fend off attackers. That’s made cybersecurity a key target area for companies looking to protect their business models, said Neil Barlow, partner at the law firm Clifford Chance.
“Hacks and phishing could effectively cause a business to crash,” said Barlow, who focuses on private equity M&A. “This is a business that is fundamental to operating, so cybersecurity has been a resilient area for quite some time.”
While megacap technology giant’s haven’t shied away from cybersecurity investments, AI tailwinds have forced companies to beef up their offerings. Google’s Wiz acquisition could force rival Amazon to make its own acquisition, Maxim said. Potential targets include startups Aqua Security, Orca Security and Sysdig.
“The Google-Wiz tie-up does give them some capabilities that make them stronger than AWS in some areas,” Maxim said. “AWS could target acquisitions to potentially bring their solution closer to Google.”
What’s next for the IPO market
Wiz’s mammoth buyout may dampen near-term sentiment for cybersecurity startups with IPO aspirations, but experts told CNBC they anticipate a pickup in the second half of the year.
One of those contenders is malware and phishing software maker Proofpoint, which told CNBC in October that it was exploring an IPO in the next 12 to 18 months. The company went private in 2021 in a $12.3 billion acquisition by private equity firm Thoma Bravo.
Forrester’s Maxim said Proofpoint and Illumio are companies ripe for IPOs in the coming months. Illumio, which offers data center and cloud security, was a member of CNBC’s Disruptor 50 list in 2017 and 2018.
Netskope, which also offers cloud security, is another company being closely watched for an IPO, said Brianne Lynch, head of market insight at EquityZen. Netskope told The Wall Street Journal last year that it was planning an IPO in the second half of 2025. The company may start to feel pressure from early investors hunting for liquidity 13 years after its founding, Lynch said.
Snyk, a cybersecurity startup founded about a decade ago, has also alluded to a public offering next year. The company was last valued at $7.4 billion and CEO Peter McKay said in a post last year that Snyk had crossed $300 million in annual recurring revenues.
The big question is whether now is the rip-the-band-aid off moment for companies that decide to IPO or whether market volatility will cause companies to once again kick the can down the road, Lynch said.
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Meta shares hit a record high on Monday, underscoring investor interest in the company’s new AI superintelligence group.
The company’s shares reached $747.90 during midday trading, topping Meta’s previous stock market record in February when it began laying off the 5% of its workforce that it deemed “low performers.”
Meta joins Microsoft and Nvidia among tech megacaps that have reached new highs of late, all closing at records Monday. Apple, Amazon, Alphabet and Tesla remain below their all-time highs reached late last year or early this year.
Meta CEO Mark Zuckerberg has been on an AI hiring blitz amid fierce competition with rivals such as OpenAI and Google parent Alphabet. Earlier in June, Meta said it would hire Scale AI CEO Alexandr Wang and some of his colleagues as part of a $14.3 billion investment into the executive’s data labeling and annotation startup.
The social media company also hired Nat Friedman and his business partner, Daniel Gross, the chief of Safe Superintelligence, an AI startup with a valuation of $32 billion, CNBC reported on June 19. Meta’s attempts to buy Safe Superintelligence were rebuffed by the startup’s founder and AI expert Ilya Sutskever, the report noted.
Wang and Friedman are the leaders of Meta’s new Superintelligence Labs, tasked with overseeing the company’s artificial intelligence foundation models, projects and research, a person familiar with the matter told CNBC. The term superintelligence refers to technology that exceeds human capability.
Bloomberg News first reported about the new superintelligence unit.
Meta has also snatched AI researchers from OpenAI. Sam Altman, OpenAI’s CEO, said during a podcast that Meta was offering signing bonuses as high as $100 million.
Andrew Bosworth, Meta’s technology chief, spoke about the social media company’s AI hiring spree during a June 20 interview with CNBC’s “Closing Bell Overtime,” saying that the talent market is “really incredible and kind of unprecedented in my 20-year career as a technology executive.”
An electric air taxi by Joby Aviation flies near the Downtown Manhattan Heliport in Manhattan, New York City, U.S., November 12, 2023.
Roselle Chen | Reuters
Joby Aviation stock soared about 12% as the flying air taxi maker got closer to launching a service in the United Arab Emirates.
The electric vertical takeoff and landing, or eVTOL, company said Monday that it delivered its first aircraft to the UAE and has completed piloted flight tests as it readies for a 2026 launch in the region.
“Our flights and operational footprint in Dubai are a monumental step toward weaving air taxi services into the fabric of daily life worldwide,” said founder and CEO JoeBen Bevirt in a release. He called the Middle East nation a “launchpad for a global revolution in how we move.”
Joby’s planned launch in the UAE was announced in February 2024 as part of an agreement with Dubai’s Road and Transport Authority. The deal included exclusive rights to conduct air taxi service in Dubai for six years.
As part of the project, Joby said in November that it began building one vertiport at Dubai International Airport, with three additional locations slated for Palm Jumeirah and Dubai’s downtown and marina. Joby also announced an air taxi agreement with three Abu Dhabi government departments in 2024.
The California-based company has made other expansion moves in the Middle East. Shares jumped earlier this month after Saudi Arabian firm Abdul Latif Jameel announced a roughly $1 billion investment for up to 300 eVTOLs. The firm participated in Joby’s Series C funding round.
Joby shares have surged more than 32% this year, swelling its market capitalization to over $9 billion.
Demand for air taxis, which take off and land similar to helicopters, has gained momentum in recent years. The service faces regulatory and safety hurdles but has been lauded for its ability to cut traffic congestion and slash emissions.
Earlier this month, President Donald Trump signed an executive order that included a pilot program for testing electric air taxis.
Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.
Joe Raedle | Getty Images
Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.
CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.
“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”
The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.
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