A year later, Microsoft acquired it for $320 million, and Rappaport became the head of Microsoft’s development center in Israel. Shah patiently waited until 2020, when the four left Microsoft and established Wiz. He was the company’s first investor, and his relationship with the founders seems to extend far beyond financial investment.
Did you know from the start that Wiz would be such a success story?
“I met the founders when I was on Adallom’s board. This acquaintance exposed me to the deep bond between the four, which has lasted 23 years. It was clear there was immense trust among them. They were exceptional in many ways, but what truly set them apart was their approach to customers, and to people. Their product? It wasn’t yet defined at that stage. But it was remarkable to see how they focused on what they were going to build within weeks. Most companies take years to figure that out.”
“One of the advantages of such a deal is the wealth of experience that gets distributed across the entrepreneurial ecosystem. In my opinion, this will positively impact the next generation of entrepreneurs.”
You’ve invested in hundreds of companies, and I’m sure each of them had excellent founders. What sets Wiz apart from other companies?
‘The unexpected was expected’
Wiz was founded just five years ago, and in that short time, it has broken record after record: within a year, it became a unicorn, raising capital at a valuation of $1.7 billion. The company achieved annual recurring revenue (ARR) of $100 million within just 18 months of its establishment – faster than any Israeli company before it.
Since then, it has surpassed $500 million in ARR, and this year it is expected to reach around $1 billion in annual revenue. And, of course, there’s the monumental $32 billion exit, which is considered the largest in the history of Israeli high-tech.
How do you explain the company’s rapid growth?
“I agree that breaking these records in five years is incredibly fast. This will be the largest acquisition ever announced by Google. When you realize that the four founders have built trust in their abilities over 23 years, it’s clear that the stage was set from day one. This also aligns with the market demand. In a way, as unexpected as it was – breaking all these records was somewhat anticipated.”
4 View gallery
The billboard that Wiz took out at Azrieli in support of completion of the hostage deal
(Screenshot from Instagram)
“We wouldn’t have invested in these companies if they didn’t have that level of ambition. What I’m trying to say is that we need to encourage ambition and the belief that what may seem impossible is actually achievable.”
It turns out that behind the scenes, negotiations between Wiz and Google continued. The investors were undoubtedly on edge due to the tension. IPO plans have their place and can yield a good return on investment, but the timelines can be lengthy, and there was no guarantee that Wiz would reach a $100 billion market cap. A cash sale – immediate and tangible – assures investors of quicker gratification. Shah refrained from commenting on the matter until the deal was finalized, though it seems he would have been happy to remain involved with the company.
In Israel, some argue that Israeli high-tech companies should go public and remain independent rather than to be sold. What do you say to them?
4 View gallery
Founders and owners of Wiz, from the right: Roy Reznik (VP Development), Ami Luttwak (CTO), Assaf Rappaport (CEO), Yinon Costica (VP Product)
(Photo: Avishag Shaar-Yashuv)
“I think this is a significant moment for Israeli entrepreneurs – a moment that serves as inspiration, first, for building global companies from scratch; and second, that truly anything is possible. One of the advantages of such a deal is the wealth of experience that gets distributed across the entrepreneurial ecosystem. In my opinion, this will positively impact the next generation of entrepreneurs. We believe Israel will see a new generation of visionary founders.”
‘There will be more developments this year’
Index Ventures is one of the most active foreign funds in Israel, with investments in more than 30 companies. Most of its assets have been in cybersecurity firms such as Adallom, Fireblocks, Elastic, and of course Wiz. It has also invested in companies in other fields, including the genealogy platform MyHeritage, the online advertising company Outbrain, and the sales management platform Gong.
You are one of the most active venture capital funds in Israel.
“We have invested in more than 30 companies over recent decades. We’ve made at least three investments in Israel in the past four months, all of which are still under the radar. And there will be more developments this year.”
Do you think there will be more Israeli companies reaching valuations of tens of billions of dollars?
“What I can tell you is that all my entrepreneurs have sent me messages in the last 24 hours, and I told everyone – the bar has been raised. We wouldn’t have invested in these companies if they didn’t have that level of ambition. What I’m trying to say, and I want to be completely honest here and not throw out random numbers, is that we need to encourage ambition and the belief that what may seem impossible is actually achievable.”
