Wiz-Backers Including Sequoia In Line For Billions Of Windfall In Google Deal

The venture capital companies that backed cybersecurity company Wiz, which has accepted a $32 billion acquisition by Google's parent Alphabet (GOOGL.O) stand to gain returns of up to 200 times for early investors, including Sequoia Capital, Cyberstarts, and Index Ventures. The $32 billion all-cash acquisition of Wiz on Tuesday represented a significant victory for roughly 25 companies listed on Wiz's cap table, as reported by PitchBook, which has been uncommon in recent years due to high interest rates and strict antitrust oversight limiting exit opportunities. Among the investors, the largest benefactors are those who invested in Wiz at the beginning and kept investing over the years. Their achievement illustrated the power law in venture capital, where a few investments yield most of the returns. 

The Israel-based early-stage company Cyberstarts co-led a $21 million seed round for Wiz in February 2020, which valued the firm at approximately $67 million after the investment. Although it participated in subsequent rounds, Cyberstarts' most significant achievement is the $6.4 million invested in its inaugural seed fund, valued at approximately $1.3 billion upon deal completion. That signifies a gain of over 200 times in five years, as per a source knowledgeable about the results, a major success in an industry founded on such achievements. Silicon Valley giant Sequoia achieved comparable success by making an early investment of $10 million in the seed round. After investing further in subsequent rounds, it now holds approximately a 10 per cent share in Wiz and may potentially gain $3 billion from the sale, sources reported. Index Ventures, currently the biggest shareholder in Wiz, holds roughly a 12 per cent interest, potentially amounting to more than $3.8 billion in cash upon completion of the deal, sources noted.

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The partners of the firm, Gili Raanan, Doug Leone, and Shardul Shah, are members of Wiz's board. They became acquainted with Wiz CEO Assaf Rappaport, who previously served as a captain in the Israel Defense Forces, along with his founding team from his initial company that was bought by Microsoft. When the team established Wiz in 2020, Cyberstarts, Index Ventures, and Sequoia promptly invested. For certain investors, achievement is both individual and career-related. "We have been acquainted for years, converse weekly, and go to each other's birthday celebrations," said Cyberstarts founder Raanan in an interview. The Cyberstarts Opportunity Fund, which put $40 million into Wiz in 2024, is converting that investment into $128 million. Thrive Capital, recognized for its focused late-stage investments, is achieving swift success with a $1 billion investment after spearheading Wiz's latest two funding rounds, one at a $12 billion valuation and another at $16 billion in an employee tender offer from late last year, the source noted.