Why Wiz and Next Insurance Walked Away from the 00 Billion Dream

The Missed Opportunity for Two Israeli Unicorns

In a remarkable week for Israeli tech, two of its most promising unicorns, Wiz and Next Insurance, were acquired for $32 billion and $2.6 billion, respectively. These exits are among the largest in the country’s history, yet their founders believe they could have reached a much loftier goal—$100 billion.

The question lingers: Could these companies have held out for a higher valuation by going public instead of selling? The answer isn’t straightforward.

Wiz, a fast-growing cybersecurity firm, had the potential for a blockbuster IPO. However, the stock market’s current uncertainty, combined with investor pressures, led to an acquisition by Google. Next Insurance, which sells insurance to small businesses, faced an even steeper climb. Unlike Wiz, which had built a dominant brand in cloud security, Next had to compete with long-established insurance giants and skeptical customers hesitant to trust a startup with their policies.

Had Wiz and Next taken the IPO route, they would have had to navigate an unpredictable stock market. Investors would have scrutinized their financials, questioning whether Wiz’s rapid growth could translate into sustainable profitability and whether Next could overcome its competitive disadvantages. While the dream of a $100 billion valuation was tempting, it remained an uncertain bet.

Beyond financial considerations, startup founders also face pressure from venture capitalists who prioritize returns for their limited partners. Even if the founders wanted to wait for an IPO, their investors often had the final say. With market conditions making it difficult to go public, M&A activity surged, making acquisitions like these more attractive.

Despite the bittersweet nature of these exits, they highlight the evolution of Israeli tech. A decade ago, billion-dollar sales were considered extraordinary; now, they are routine. As seasoned entrepreneurs continue to push the boundaries, the next generation may well take Israeli startups beyond $100 billion—and perhaps even to the trillion-dollar mark.

What Undercode Says:

The Balance Between Cashing Out and Playing the Long Game

The decision to sell or hold out for a future IPO is one of the most complex dilemmas in entrepreneurship. Founders must weigh immediate, guaranteed returns against the uncertain promise of greater wealth down the road.

In Wiz’s case, selling for $32 billion was a near-irresistible offer. While an IPO could have valued the company higher over time, it also carried significant risks. Google saw Wiz’s potential as a strategic asset and was willing to pay a premium. However, Wall Street investors would have been more skeptical, likely questioning the company’s profitability in the long term.

For Next Insurance, the situation was even more challenging. Unlike cybersecurity, which thrives on innovation and market disruption, the insurance sector is deeply rooted in legacy institutions. Small business owners often prefer to buy from well-known insurance providers rather than tech startups. This made Next’s path to a $100 billion valuation highly uncertain, if not improbable.

The Role of Venture Capital in Startup Exits

Many founders dream of building massive, independent companies, but they are often overruled by their investors. Venture capitalists inject millions into startups with the expectation of significant returns, usually within a decade. If market conditions make IPOs less viable, M&A becomes the preferred exit strategy.

Even in cases where a company might have the potential to grow further, external pressures can force an early sale. The funds backing Wiz and Next likely saw the current deals as the best possible outcome given today’s economic climate.

What This Means for the Future of Israeli Tech

While these exits may feel like missed opportunities, they are also a testament to the progress of Israeli startups. Two decades ago, an Israeli company selling for $1 billion was considered groundbreaking. Today, we are seeing multi-billion-dollar acquisitions.

Perhaps the most significant takeaway is that both Wiz and Next were founded by experienced entrepreneurs who had already sold previous companies. This suggests that future founders, armed with even more experience and capital, may push the boundaries even further.

If Israel maintains its strong tech ecosystem and democratic stability, it’s not a question of if the country will produce a $100 billion company—it’s when. And perhaps, one day, an Israeli startup will even reach the trillion-dollar mark.

Fact Checker Results

Wiz’s sale to Google for $32 billion is confirmed, but an IPO at the same valuation would have been uncertain due to market scrutiny on profitability.
Next Insurance faced tougher challenges in scaling compared to Wiz, given its competition with long-established insurers.
Israeli tech has seen an upward trend in valuations over the years, making future $100 billion startups a realistic possibility.