From $6M Bet to 200x Return: The Incredible Success Story of Early Wiz Investor

The recent $32 billion all-cash acquisition of Wiz by Google’s parent company, Alphabet, marks a significant moment in the cybersecurity industry, promising substantial returns for early-stage investors. This deal highlights the growing importance of cybersecurity solutions and the lucrative opportunities available for venture capitalists.

Major Investors Set to Benefit from the Acquisition

The acquisition is a remarkable success for Sequoia, one of the leading venture capital firms globally. According to Bloomberg, Sequoia is expected to earn around $3 billion, which represents nearly 25 times the capital it invested in Wiz.

Cyberstarts’ Impressive Returns

While Sequoia’s returns are substantial, another early investor, Cyberstarts, stands to gain even more. This Israel-based venture capital firm invested $6.4 million from its initial $54 million fund during Wiz’s seed round in February 2020. Here are some key financial outcomes for Cyberstarts:

• Cyberstarts currently owns 4.1% of Wiz.
• The firm is projected to make an impressive $1.3 billion from this investment.
• Additionally, Cyberstarts previously sold $120 million in shares of Wiz, bringing its total return to $1.42 billion, which translates to an extraordinary 222x return on its original investment.

Ongoing Investments and Future Prospects

In addition to its initial investment, Cyberstarts participated in later funding rounds, contributing a total of $40 million from its opportunity fund. These later investments have grown to a value of $128 million, yielding a more modest 3.2x return on invested capital, as reported by TechCrunch.

Shai Goldman, a partner at Next Wave NYC, noted on X that “Cyberstarts is going to have one of the best returning funds in VC history.” He emphasized that this achievement stems from their inaugural fund, showcasing the potential benefits of backing early-stage funds as a limited partner.

A Unique VC Story

Cyberstarts is not your typical emerging venture capital manager. Founded by Gili Raanan, a former general partner at Sequoia, the firm launched its first fund in 2018 with a focus on cybersecurity investments. The small $54 million fund has already achieved a remarkable 26x multiple on its limited partner capital.

Moreover, the firm is eyeing other potential exits, such as Island, a startup reportedly securing funding at a valuation of $4.5 billion.

Index Ventures’ Stake in Wiz

Index Ventures, which holds a 12% stake in Wiz, is also positioned to benefit handsomely from the acquisition, with projections of over $3.8 billion in returns upon completion of the sale, according to Reuters.

In conclusion, the acquisition of Wiz not only underscores the increasing demand for cybersecurity solutions but also illustrates the lucrative opportunities that exist within the venture capital landscape. For more insights into the world of venture capital and cybersecurity, check out our other articles on venture capital trends and cybersecurity innovations.