Google closed its thirty-two billion dollar acquisition of cybersecurity company Wiz this week. This marks the biggest acquisition in Google’s history, as well as the largest ever acquisition of a venture-backed startup.
On the latest episode of TechCrunch’s Equity podcast, Rebecca Bellan, Sean O’Kane, and I were joined by Shardul Shah, a partner at Wiz’s largest shareholder Index Ventures. Shah walked us through his history with Wiz, which extends before Wiz itself. He previously backed Adallom, the startup previously founded by Wiz’s Assaf Rappaport, Ami Luttwak, and Roy Reznik.
We also asked Shah about why he thinks the company was such an appealing acquisition target, and how he responded when Wiz walked away from Google’s previous acquisition offer. “It’s no surprise that it’s Wiz,” Shah said. “Wiz is at the center of three tailwinds: AI, cloud, and security spend.”
Read an excerpt of our conversation, edited for length and clarity, below. Shah kicked things off by noting, half-jokingly, that we may have been underselling things by calling the acquisition one of our deals of the week.
Shardul Shah said he believes this should qualify as deal of the year or decade, not just the week. He emphasized that this is the largest venture-backed acquisition in history and is really important for the industry.
Rebecca Bellan replied that they would work that out in post-production.
Shardul Shah continued, stating it is no surprise that it’s Wiz. He explained that Wiz is at the center of three tailwinds: AI, cloud, and security spend. Those are central today in light of the AI era where every single workload needs to be secured. He expressed pride that Index Ventures was the largest shareholder in the company and believes it is at least the deal of the month.
Rebecca Bellan then asked how long it had been since his initial investment in Wiz, noting this is the kind of exit investors dream about.
Shardul Shah reflected that it has been about ten years since he joined the board of the founders’ first company, Adallom. That gave him a front row seat at how they make decisions and develop trust. Assaf Rappaport called him on his birthday when he started Wiz, and Shah joined the board during the seed round.
Anthony Ha followed up, acknowledging they had discussed the deal before. Because Wiz isn’t a consumer-facing company, he asked what beyond the important sectors made Wiz an appealing investment and acquisition target.
Shardul Shah explained that at Index Ventures, the core of their business is to focus on people. He believes the core of the acquisition was the people. He described Assaf as an incredible leader with great intuition, Ami as someone who lives in the future, Yinon Costica as very present, and Roy as an execution machine. Together they created a culture of trust that allowed them to build a platform from the start and take on an existing category with unrivaled speed.
Sean O’Kane brought up the history where Google previously approached the company and Assaf walked away from the deal. He asked if that moment felt validating for Shah as an investor.
Shardul Shah said not really, partly because external validation does not matter to him. He mentioned that he told the founders he believed in them more than they believed in themselves. He wrote a blog titled “Learning to Say No” directed at founders. When founders make decisions, you trust the inputs and how they make decisions, not concentrate on the outputs or the luck involved in validation.
Rebecca Bellan asked how important it was in the acquisition that Wiz could get resources from Google while maintaining its own leadership.
Shardul Shah clarified for the audience that Wiz aims to secure cloud infrastructure and code in production. Google’s resources, infrastructure, and AI talent allow Wiz to extend its capabilities while retaining its culture of trust and camaraderie.
Anthony Ha concluded by asking what the biggest impacts of such a large acquisition will be over the next few years.
Shardul Shah said he thinks it starts with inspiration. There is a new imagination for what can be possible for entrepreneurs across the globe. He is proud that many people’s lives will change from this investment, which is meaningful and fulfilling. But he believes what is more important is the talent, the skills, and the aspirations of entrepreneurs. He expressed excitement to see what the limits are for the next generation.