Wiz, a cybersecurity company that has garnered significant attention, is acquiring a substantial amount of cloud security technology in order to broaden its product offerings, particularly among developers
According to sources with knowledge of the matter, it is acquiring Dazz, a company that specializes in security remediation and risk management. The transaction is valued at $450 million and is structured as a cash-and-share transaction.
The price estimate is slightly higher than Dazz’s most recent valuation, which was $50 million at a post-money valuation of just under $400 million.
Dazz concentrates on remediation and posture management, which are critical services in the cybersecurity market that Wiz was not adequately addressing.
“Dazz is the market leader, with the best talent and customers, and it is a great cultural fit,” stated Assaf Rappaport, Wiz’s CEO, in an interview.
The manner in which an enterprise manages the numerous vulnerability alerts it may receive across its networks is influenced by remediation, which is the process of assisting in the understanding and resolution of vulnerabilities.
Posture management is a more proactive product that provides an organization with a more comprehensive comprehension of the size, shape, and function of its network, enabling it to develop more effective security services.
While it is incorporated into the larger company’s stack, Dazz will continue to function as a distinct entity. Wiz has established itself as a “one-stop-shop,” and Rappaport confirmed that an integrated offering will remain a significant component of the company’s strategy.
This is in stark contrast to the majority of other SaaS enterprises, according to him. Rappaport stated that the security industry is characterized by “a significant number of Frankenstein mashups,” in which companies prioritize revenue over the development of a single technology framework that functions as a platform.
Perhaps integration is even more critical in cybersecurity than in other sectors of enterprise IT.
A long-standing and intimate partnership
Wiz and Dazz had already established a close relationship prior to the signing of this agreement. Dazz was co-founded by Merav Bahat, the CEO, Tomer Schwartz, and Yuval Ofir (CTO and VP R&D, respectively), who collaborated with Assaf Rappaport at Microsoft, which acquired his previous venture, Adallom.
Bahat was one of Adallom’s initial investors after Rappaport departed to establish Wiz with Adallom co-founders Ami Luttwak, Yinon Costica, and Roy Reznik. In the same vein, Assaf participated as a modest investor when Bahat established Dazz.
However, the relationship extends beyond the workplace. Bahat and Rappaport are also close friends, and she was a second family to Mika, Rappaport’s adored dog who was known as Wiz’s Chief Dog Officer (complete with a LinkedIn profile ).
The two encountered extremely distressing circumstances as the transaction progressed: Mika and Bahat’s mother passed away.
“We are anticipating a new era of optimism in this location,” Bahat stated.
Rumors regarding this acquisition began to circulate earlier this month. Rappaport verified that this was the moment at which they began to engage in meaningful conversation.
That is not the sole instance of M&A discussion that pertains to Wiz. Google attempted to acquire Wiz for $23 billion earlier this year in order to establish a substantial cybersecurity business.
Partly due to Rappaport’s assertion that the company could expand even further on its own terms, Wiz withdrew from the agreement. Wiz is striving to achieve this objective with this agreement.
The acquisition is part of Wiz’s expansion strategy, which included the allocation of $1 billion to its M&A department earlier this year.
The company has raised a total of nearly $2 billion, and we have been informed that an additional round is set to conclude in the coming weeks. Other transactions have included the acquisition of Gem Security for $350 million; however, Dazz represents its most significant acquisition to date.
There may be additional mergers and acquisitions in the future. “We anticipate that the upcoming year will be characterized by acquisitions,” Rappaport stated.
Developers require additional assistance
TechCrunch was informed by Luttwak of Wiz that the organization is committed to the development of additional tools that developers require in order to perform their duties.
Enterprises have made substantial investments in cloud services to enhance the flexibility of their technology stack and expedite their workflow. However, this transition has resulted in a substantially altered security profile.
The complexity of network and data architectures, as well as the size of attack surfaces, present opportunities for malicious hackers to compromise systems.
AI is substantially complicating all of this. (It is also an opportunity: a new generation of tools to defend us are all based on AI.)
Wiz’s unique selling proposition has been its comprehensive methodology. Wiz examines applications, data, and network processes for security risk factors by importing data from AWS, Azure, Google Cloud, and other cloud environments. It then offers a variety of detailed views to help users identify the locations of these risks.
It has over a dozen products that address areas such as code security, container environment security, and supply chain security. Additionally, it offers a variety of partner integrations for companies that collaborate with other providers or wish to integrate functions that Wiz does not currently provide.
Wiz provides a certain level of remediation to assist in the prioritization and resolution of issues; however, Luttwak asserts that Dazz’s product is superior.
“We now have a platform that can provide a comprehensive 360-degree view of risk, including infrastructure and application,” he stated.
“Dazz is the industry leader in the management of attack surface posture, which involves the collection of vulnerability signals from the application layer across the stack and the construction of a remarkable context that enables the tracking of these signals back to the engineers to assist in remediation.”
In July 2024, during Dazz’s $50 million fundraising campaign, I conducted an interview with Bahat, during which she emphasized the importance of developing a robust point solution. She stated that the company’s third quarter was “amazing” this week.
“However, the market’s momentum is a factor that stimulates these types of transactions,” she stated, noting that Dazz had received acquisition proposals from other organizations as well.
“It is logical for them to have it in a single platform when you consider the customers and joint customers that we have with Wiz.”
A few of Dazz’s competitors are operating independently: Cyera, like Dazz, is a specialist in attack surface management.
Yesterday, it disclosed a $300 million funding round at a $5 billion valuation, which confirms our previous information. However, what will it do with that money? Of course, it is necessary to make acquisitions.
Wiz currently generates annual recurrent revenues of $500 million and intends to increase this figure to $1 billion within the next year. It serves more than 45% of the Fortune 100 as its clientele.
Dazz reported that its annual revenue (ARR) is in the tens of millions of dollars and that it is presently expanding at a rate of 500% on a customer base of approximately 100 organizations.
