(Reuters) -Israeli cybersecurity startup Wiz has ended talks with Google-parent Alphabet (NASDAQ:GOOGL) on a reported $23 billion deal that would have made it the U.S. tech giant's largest-ever acquisition, according to a Wiz memo seen by Reuters.
Wiz CEO Assaf Rappaport said the company would now focus on an initial public offering, as it had planned earlier, and aims to achieve an annual recurring revenue of $1 billion.
"Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice," Rappaport said in the memo, referring to an acquisition offer.
Neither Alphabet nor Wiz have officially acknowledged deal talks. The Wiz memo did not name Google or Alphabet.
Google did not immediately respond to a Reuters request for comment, while Wiz declined to comment.
Reuters reported earlier this month that Alphabet was in advanced talks to buy Wiz for roughly $23 billion, citing a person familiar with the matter, a valuation nearly double of what Wiz had announced in May, when it raised $1 billion in a private funding round at a $12 billion valuation.
Wiz provides cloud-based cybersecurity solutions that help companies identify and remove critical risks on cloud platforms, powered by artificial intelligence.
Wiz's decision to call off the deal will be a setback for Google, which has been investing in its cloud infrastructure and focusing on winning clients for the cloud business that generated more than $33 billion in revenues last year.
The global cyber outage from last week, brought on by a faulty update from cybersecurity firm CrowdStrike (NASDAQ:CRWD) , was one of the major reasons for the deal talks falling through, Bloomberg News reported on Tuesday.
The outage increased the potential value of cloud cybersecurity companies such as Wiz and led to increased interest in these firms, the report said.
The fallout is a second blow for Alphabet in the M&A space in recent times, after reports of its decision to walk away from a deal for online marketing software company HubSpot (NYSE:HUBS).
Wiz would have been Alphabet's second big acquisition in the cybersecurity space, since its $5.4 billion purchase of Mandiant in 2022.