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Google’s proposed $23 billion acquisition of cloud security startup Wiz would help it compete with Microsoft, the top seller of security software. If the deal manages to avoid antitrust challenges and other hang-ups in the ongoing negotiations—and those issues are still a big if—it would also create a windfall for the startup’s investors during a period in which such returns have been lacking.

Several venture capital firms, including Index Ventures, Sequoia Capital, Insight Partners, Greenoaks Capital Partners and Israeli venture firm Cyberstarts, collectively stand to return at least $7 billion on their Wiz investments, which began in 2020, the year it was founded. (See a full list below.)

Even latecomers such as Andreessen Horowitz and Thrive Capital, which invested in the company for the first time in May at a $12 billion valuation including the investment, could double their money with the company’s sale, a rare feat for such a short period of time. Altogether, Wiz raised $1.9 billion in venture capital.

“It’s a real needle mover” for investors, said Robert Ackerman, managing director at cybersecurity investment firm DataTribe, which is not an investor in Wiz.

The deal could still fall apart based on concerns that antitrust regulators would eventually scuttle it. Adobe Systems, for instance, abandoned its planned $20 billion takeover of design software startup Figma late last year after antitrust scrutiny. The arrangement would have generated a rich payout to Figma’s backers, including Index and Sequoia Capital.

What’s more, Google and Wiz are still negotiating payments Wiz stakeholders such as the founders would receive for hitting certain performance goals after the acquisition, known as earnouts, according to an investor in Wiz.

$1 Billion ARR Target

Google has proposed paying a high price for the young company, whose revenue is quickly growing.

Wiz has exceeded $500 million in annual recurring revenue, roughly 5 times what it was generating two years ago, and now expects to cross $1 billion in ARR (a metric that refers to projected subscription revenue over the next 12 months) by mid-2025, according to a person close to the company.

Wiz’s $500 million in ARR makes the potential $23 billion acquisition price roughly 46 times its forward revenue. That’s a far higher valuation multiple than is typical for publicly traded security companies. Zscaler, one of the largest publicly traded cloud security firms, trades at around 14 times the $2.14 billion in revenue analysts expect it to generate this year.

But Google likely sees an opportunity to rapidly accelerate revenue growth at Wiz, which largely sells to Fortune 500 companies, by selling its software to the startups and smaller businesses that use Google Cloud. Wiz’s software helps businesses keep track of their applications that run in the cloud, and its customers rent servers from a range of cloud providers including Amazon Web Services, Microsoft, Google and Oracle, according to some of its customers.

And Wiz is getting closer to breaking even. It has lost more than $100 million in the past 12 months, but its quarterly losses have shrunk from roughly $40 million to less than $30 million over the past year, according to a person who reviewed its finances.

“Everyone’s trying to get some type of differentiation in their cloud products so they can lock in recurring revenue, especially as businesses are beginning to spend on new cloud categories like generative AI,” said Keith Campbell, a senior partner at tech consultancy West Monroe.

Google Cloud appears to have successfully integrated Mandiant, a security incident response firm it purchased for about $5 billion two years ago, which should make it easier to sell Wiz services to its customers, he said. Google Cloud also will try to convince Wiz customers to rent its cloud servers. A Google spokesperson did not immediately respond to requests for comment.

The VC firms’ stakes and Wiz’s losses and revenue target haven’t been previously reported. The Wall Street Journal first reported on the Google talks and current Wiz’s revenue.

Here’s what we know about Wiz’s largest shareholders:

Wiz Founders

Wiz’s founders Assaf Rappaport, Ami Luttwak, Yinon Costica and Roy Reznik each own 9.5% of the company, an amount worth $2.2 billion per person, if the $23 billion purchase price comes to fruition, according to a person close to the company.

After serving together in the Israel Defense Forces, they founded a cloud security startup, Adallom, which Microsoft bought in 2015 and used to develop its Defender software to protect companies’ cloud workloads. That product is a backbone of Microsoft’s more than $20 billion in annual security software sales. The founders left Microsoft in 2019 to start Wiz. Google, which doesn’t have a product that competes directly with Defender, could now look to Wiz to bulk up its cloud security software offerings.

Index Ventures

Index owns at least 11% of the company, making it the largest outside shareholder, a person familiar with the figure said. That stake could be worth $2.5 billion under the proposed deal. Index first invested in Wiz in December 2020 when it co-led a $100 million Series A that valued the company at $500 million. It participated in subsequent rounds, then co-led Wiz’s 2023 Series D, a $300 million round that valued the company at $10.3 billion.

Index partner Shardul Shah, a New York–based member of Wiz’s board of directors, wrote on LinkedIn last year that he had “not seen a software company move at the velocity of Wiz, they’re a true ‘first-of-their-kind.’”

Sequoia Capital

The VC firm, known for its highly profitable early bets on Google and Nvidia, also stands to gain billions from Wiz. Alongside Cyberstarts, Sequoia first invested in Wiz in early 2020. Today, Sequoia owns at least 10% of Wiz, potentially worth $2.3 billion, according to a person familiar with the firm’s investments.

Sequoia partner Doug Leone is on Wiz’s board of directors, and the firm has participated in every financing round since sending its first check.

Insight Partners

The New York investment firm first invested in Wiz in December 2020, when it co-led the company’s $100 million Series A deal. Insight later co-led Wiz’s $250 million Series C in 2021. Today the firm owns a roughly 9% stake that could be worth $2 billion, according to a person familiar with the firm’s investments.

Jeff Horing, Insight co-founder, and Teddie Wardi, managing director, led the investments.

Greenoaks Capital

San Francisco–based Greenoaks Capital first invested in Wiz in 2021 when it participated in a Series B that valued the company at $1.7 billion. It also co-led the company’s Series C and Series D and later participated in its Series E. In total, Greenoaks has invested $275 million for a 5% stake that could be worth $1.1 billion, according to a person familiar with the firm’s investments.

Cyberstarts

Cyberstarts, Wiz’s very first VC backer, owns about 4% of the company worth $920 million, according to one of the people. Cyberstarts has invested a total of about $30 million, including $6.3 million in the company’s seed round, the person said, and is poised to make a return of 130 times on its initial seed investment.

Lightspeed Venture Partners

The Menlo Park, Calif.–based firm has invested a total of $265 million in Wiz, according to a person familiar with the matter, across two funding rounds: the 2023 Series D, which it co-led, and the 2024 Series E. The firm owns approximately 4% of Wiz worth $920 million, according to someone familiar with the company’s finances.

Advent International

Private equity firm Advent International led the 2021 round that valued Wiz at $1.7 billion, acquiring an estimated stake of over 3% and later participating in the 2021 Series C, which valued the company at $6 billion.

Thrive Capital and Andreessen Horowitz

Thrive Capital, the New York–based VC firm led by Josh Kushner, and Menlo Park–based Andreessen Horowitz first invested in Wiz this May, when it co-led a $1 billion investment at a $12 billion valuation. The two firms own roughly 1% to 2% of Wiz, with each of their shares worth up to $460 million.

G Squared

G Squared has invested about $200 million in Wiz, including a roughly $50 million investment in its 2021 Series C that valued the company at $6 billion, according to a person at the firm.

The Chicago-based investment firm also purchased $100 million of shares from existing shareholders at the same valuation and made a $50 million investment in Wiz’s 2023 Series D, which valued the company at $10.3 billion.

Greylock Partners

Menlo Park–based Greylock Partners, whose portfolio company, Rubrik, recently went public, owns less than 1% of Wiz, worth an estimated $115 million.