Wiz’s $32 billion all-cash acquisition by Google parent Alphabet promises a colossal payday for the cybersecurity startup’s early-stage investors.
The deal is a big win for Sequoia, one of the best-known VC firms, which stands to make $3 billion, about 25x the money it invested in the company, Bloomberg reported. Despite substantial returns for Sequoia’s limited partners, their percentage gains will be far less than those of another early Wiz backer: Israel-based VC Cyberstarts.
Cybersecurity-focused Cyberstarts invested $6.4 million from its first $54 million fund towards Wiz’s seed round in February 2020.
Today, that fund owns 4.1% of Wiz, which means it’s poised to make a whopping $1.3 billion on the deal, according to a person familiar with the firm’s performance. Cyberstarts also previously sold $120 million shares of Wiz in secondary transactions, bringing the fund’s total return to $1.42 billion — a remarkable 222x return on the original investment.
Cyberstarts also participated in Wiz’s later-stage rounds, investing a total of $40 million from its opportunity fund. Those investments are now worth $128 million, a more modest 3.2x return on invested capital, a person familiar with Cyberstarts performance told TechCrunch.
“Cyberstarts is going to have one of the best returning funds in VC history,” Shai Goldman, a partner at Next Wave NYC, wrote on X. “This investment was done out of their inaugural fund, a good reminder that Fund 1 can be amazing one to back as a LP.”
Cyberstarts wasn’t an ordinary emerging VC manager when it closed its inaugural fund in 2018. The firm was started by Gili Raanan, who previously spent nearly nine years as a Sequoia general partner leading its Israel investment strategy.
The small $54 million fund has already achieved a 26x multiple on its limited partner capital. And that’s not even counting other potential exits, such as Island, a startup reportedly raising capital at a valuation of $4.5 billion.
Index Ventures, which owns a 12% stake in Wiz, is poised to make over $3.8 billion once the sale is complete, Reuters reported.
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