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The acquisition of Israeli company Wiz by Alphabet, Google’s parent company, for $32 billion is not only the largest exit in Israel’s history—it is a defining moment that will profoundly impact local high-tech, the cybersecurity sector, the Israeli economy and state tax revenues. This deal places Israel at the forefront of the global cybersecurity industry and could change the game for many Israeli startups.
Google already has a significant development presence in Israel, but this acquisition signals its commitment to expanding operations even further.
After acquiring several Israeli companies, such as Waze in 2013 and the analytics firm Alooma in 2019, Wiz will be its largest purchase yet. It is expected that Google will invest in expanding Wiz, increasing its workforce and transforming Israel into a key global cybersecurity innovation hub.
At the same time, this deal is likely to attract other tech giants seeking Israeli cybersecurity startups and encourage them to establish development centers in the country.
Wiz is part of a leading group of Israeli cybersecurity firms, with its main competitor, Orca Security, standing out among them. This acquisition will strengthen Orca, as many clients who prefer not to be associated with Google may turn to its competitor instead. Overall, the Israeli cybersecurity market stands to benefit in several ways:
- The valuation of Israeli cybersecurity firms may rise as investors search for “the next Wiz.”
- Increased demand will enable more companies to raise significant capital, fueling technological advancements and growth.
- There will be a surge in demand for Israeli cybersecurity professionals, leading to higher salaries and an increased focus on cybersecurity training programs.
- Academic and technological institutions in Israel will need to adapt quickly by offering advanced training programs to prepare the next generation of experts.
- Israeli startups will attract greater interest from venture capital funds and global tech companies, boosting their valuations and making it easier for them to secure funding for new developments.
According to estimates, the deal will generate approximately 15 billion shekels in tax revenue for the State of Israel. The founders—Assaf Rappaport, Ami Luttwak, Yinon Costica and Roy Reznik—are expected to pay a capital gains tax of 25%-30% on the billions they will receive.
Additionally, employees receiving bonuses will be subject to high tax rates. These revenues could finance government innovation programs and support higher education in technology-related fields, strengthening Israel’s educational and technological infrastructure.
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The Wiz deal not only reinforces Israel’s position as a global cybersecurity leader but also presents new challenges. Will the government seize this opportunity to build an ecosystem that nurtures the next Wiz?
Policymakers must develop strategies to promote investment in infrastructure, professional training and support for early-stage startups. Economic incentives, such as tax reductions for newly established tech companies, could serve as a catalyst for further growth.
Ultimately, the Wiz deal is more than just a historic exit—it is a strong indicator of the resilience and potential of Israeli high-tech. It cements Israel’s global leadership in cybersecurity, attracts additional investments and injects billions into the economy.
The future of Israeli high-tech depends on our ability to capitalize on these opportunities, continue developing cutting-edge technologies, and build the infrastructure needed to sustain long-term success.
- Dr. Amit Serusi is a strategy consultant, angel investor and entrepreneur