Google buys Wiz: Backer Sequoia Capital to reap 25-fold return from the deal

Wiz backer Sequoia Capital is poised to deliver a return of about 25 times its invested capital from the cybersecurity startup’s pending sale to Google parent Alphabet Inc., according to a person with knowledge of the matter.

The multiple on invested capital, known as MOIC, is calculated based on Sequoia’s roughly 10% stake in Wiz, which Alphabet agreed to buy for $32 billion in cash. Sequoia is set to reap about $3 billion from the sale, said the person, who asked not to be identified discussing private information.

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Sequoia is one of several venture capital firms that invested in Wiz that are now on track to reap big gains. Index Ventures has a stake of about 13% of the company, and Insight Partners has a stake of about 8%, according to people familiar with the information. Sequoia, Insight and Index declined to comment on the deal.

Meanwhile, Israeli venture capital firm Cyberstarts is set to gather $1.3 billion after backing Wiz with $46 million — an MOIC of 28.

And Wiz backer Greenoaks Capital Partners is poised to secure about $2 billion from the transaction, according to a separate person familiar with the matter. Greenoaks invested roughly $300 million in Wiz, and based on that amount, the firm’s MOIC from its bet is 6.67.

Representatives for Greenoaks and Cyberstarts declined to comment.

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Wiz will join the Google Cloud business after completion of the deal, which would be Alphabet’s largest to date. Wiz’s platform aims to prevent cybersecurity breaches in the cloud.

“Wiz and Google Cloud share a vision to improve security by making it easier and faster for organizations of all types and sizes to protect themselves, end-to-end, across all major clouds,” Sequoia partner Doug Leone wrote in a blog post Tuesday. “This will help spur the adoption of multicloud cybersecurity.”

In 2020, Sequoia and Cyberstarts led a $20 million seed round for Wiz and participated in other funding rounds, including a so-called Series A with Index Ventures and Insight Partners.

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“The team quickly hit on the insight that cloud security needed a simpler, agentless architecture for an increasingly complex digital world,” Leone wrote Tuesday.