Wiz’s $32 billion all-cash acquisition by Google’s parent Alphabet promises a huge payday for early investors in cybersecurity startups.
The deal was one of the most famous venture capital firms selling $3 billion, a huge win for Sequoia, about 25 times the money the company invested, Bloomberg Report. Despite the huge returns from Sequoia’s limited partners, its percentage growth will be much lower than another early Wiz supporter: VC Cyberstarts in Israel.
Cybersecurity-focused Cyberstarts invested $6.4 million from its first $54 million fund, investing in Wiz’s seed round in February 2020.
Today, the fund owns 4.1% of WIZ, meaning the company is expected to make up to $1.3 billion in the deal, which is said by someone familiar with the company’s performance. Cyberstarts also previously sold $120 million in Wiz shares in a middle school deal, bringing the fund’s total return to $1.42 billion, a 222-fold return on the original investment.
Cyberstarts also participated in Wiz’s late round, investing $40 million from its Opportunity Fund. Those familiar with Cyberstarts Performance told TechCrunch that the investments are now worth $128 million, which is 3.2 times the return on invested capital.
“Cyberstarts will have one of the best return funds in VC history,” said Shai Goldman, partner at Next Wave NYC, Written on X. “This investment was made by their first fund, which is a good reminder that Fund 1 can come back as an LP.”
CyberStarts was not an ordinary emerging venture capital manager when it closed its inaugural fund in 2018. The company was founded by Gili Raanan, who has previously spent nearly nine years leading the Israeli investment strategy at Sequoia’s general partners.
The $54 million small fund has achieved multiples of 26 times on its limited partner capital. This hasn’t even calculated other potential exports, such as Island, which is reportedly in Valuation is $4.5 billion.
Index Ventures, which owns 12% of WIZ shares, will earn over $3.8 billion once the sale is completed Reuters report.
