Google’s $32B Wiz Acquisition: The Deal That Reshapes Tech M&A?

Would You Turn Down $23B? For Wiz, The Answer Was a Resounding Yes.

Founded in 2020, Wiz has rapidly become one of the fastest-growing software companies in the world, boasting nearly half of the Fortune 100 as customers. Its meteoric ARR growth had tech bankers from San Francisco to Singapore on high alert, with many remembering the record-breaking milestone of hitting $100 million in ARR just 18 months after launch. Last year, the cloud security powerhouse raised $1 billion at a $12 billion valuation, and this year, it hit $500 million in ARR, placing the deal at approximately a 60x run rate multiple. Fast forward to today, Wiz has agreed to a $32 billion all-cash acquisition by Google, a strategic move to keep pace with Amazon and Microsoft in the cloud space.

Even more interestingly, Wiz was offered $23B by Google just last year. So what was the holdup on that deal? Was this a case of miraculous foresight, a risk-forward approach to growth, or simply a well-informed bet on themselves and better macro conditions ahead?

A Masterclass in Strategic Patience

What initially seemed like a holdout for an IPO now looks to be a calculated stall—waiting for a more favourable M&A environment, to be precise. As regulatory pressure on tech deals fluctuated, Wiz played its hand incredibly wisely, resisting what would’ve been, by all accounts, a spectacular exit, in favour of holding out for a landscape where high-profile acquisitions could move with fewer antitrust roadblocks. This decision paid off, marking one of the largest venture-backed acquisitions in history.

But does this signal a broader shift in the M&A market?

After years of stagnation, tech acquisitions seem to be making a dramatic comeback. So far this year, there have been 11 startup sales worth over $1 billion, totaling $54.5 billion, according to CB Insights. By contrast, in Q1 2024, there were only two such deals, worth just $3.2 billion combined. For investors, this is a long-awaited tailwind. IPOs and major startup M&A had largely dried up, leaving funds starved for liquidity. Now, M&A/IPOs are re-emerging in a big way. Particularly for the usual high-growth verticals like AI, cybersecurity, and enterprise software (e.g. SaaS) we tend to care most about.

SoftBank announced it will acquire chip startup Ampere Computing in a $6.5 billion all-cash deal that is expected to close in the second half of 2025. Insurtech startup Next Insurance is getting acquired by Germany’s Munich Re for $2.6 billion. Nvidia reportedly acquired synthetic data startup Gretel for a nine-figure price tag exceeding its latest $320 million valuation. And the long-awaited Klarna IPO has finally arrived. Arguably more important, albeit less concrete, sentiment is changing with a new administration that, although early, is seemingly keeping up with its promise of less regulation and more M&A activity.

Not All Sunshine and Rainbows

While deal activity is heating up, not every acquisition will sail through smoothly. The Federal Trade Commission (FTC) recently blocked the $627 million acquisition of healthcare startup Surmodics by private equity firm GTCR. Similarly, the Department of Justice (DOJ) sued to halt HP’s $14 billion proposed acquisition of Juniper.

Regulators continue to scrutinize major transactions because of well-established antitrust laws, particularly in sectors like AI and cybersecurity, which are increasingly viewed through a national security lens. Companies in these verticals will likely still face hurdles, even in a broadly more M&A-friendly climate. Additionally, despite the upswing, US-based M&A activity may remain somewhat sluggish compared to global markets as interest rates remain relatively high and tariffs continue to create market uncertainty. 

“Anyone who was acting surprised wasn’t paying much attention to the current administration’s viewpoints,” says Justin Abelow, Managing Director at Houlihan Lokey to PitchBook. While he expects continued challenges, he also predicts a significant uptick in private equity growth and rollup deals later this year, particularly if market conditions stabilize and interest rates decline.

Muted M&A activity in the past three years, driven by higher interest rates that led to increased borrowing costs and lower corporate valuations, resulted in financial sponsors delaying exits, which has resulted in pent-up supply.

While broader market skepticism continues to weigh on M&A activity, the biggest factor at play remains the heightened antitrust scrutiny that has plagued recent deals. The risk of deals being blocked—along with the resulting breakup or reverse breakup fees (penalties paid if a transaction is terminated, whether by one of the parties or due to regulatory intervention)—has deterred many potential acquisitions. These fees exist to compensate both parties for the time and resources invested in deal making. In the case of Google’s acquisition of Wiz, the termination fee is particularly notable: at 10% of the purchase price ($3.2 billion), it is significantly higher than industry norms, signaling strong confidence that the deal will go through.

This stands in contrast to the recent wave of regulatory scrutiny, particularly under Lina Khan’s tenure as head of the FTC, which saw major tech M&A deals blocked, including Adobe’s attempted acquisition of Figma. That deal’s collapse resulted in Adobe paying Figma a $1 billion breakup fee. Despite those setbacks, Google’s willingness to push forward with such a high-risk deal suggests renewed optimism in the M&A market—a sign that investors and operators are beginning to see a more favourable environment for major transactions, the proverbial light at the end of the tunnel. 

The Bigger Picture: What This Means for Startups and Investors

For high-growth startups, the message is clear: M&A is seemingly back, and strategic patience—or, if we’re being honest, prudent cash management and responsible growth to weather the storm for many—has paid off. Economic downturns forge resilient companies, and the best of them rise to the top, even amid significant headwinds.

On the investor side, the backlog of exits and record levels of dry powder mean that dealmaking could continue accelerating. While regulatory scrutiny remains a factor, it’s unlikely to halt the momentum entirely.

Wiz’s $32 billion acquisition may have dominated headlines this past week, but the real intrigue lies in the fallout. With CoreWeave’s early lackluster IPO, following its recent acquisition of Weights and Biases, the question isn’t just who’s next, but how long this wave of high-profile deals will last.