Wiz’s record-breaking $32 billion all-cash acquisition by Alphabet, Google’s parent company, is shaping up to be one of the most lucrative exits the cybersecurity startup scene has ever seen—especially for its earliest backers.
Among the biggest winners is legendary venture firm Sequoia Capital, which is set to walk away with a staggering $3 billion. According to Bloomberg, that’s roughly 25 times Sequoia’s original investment in Wiz. While those gains are impressive, they pale in comparison to the jaw-dropping windfall heading toward another early investor, Israel-based VC firm Cyberstarts.
Cyberstarts, known for its laser focus on cybersecurity startups, placed an early bet on Wiz back in February 2020. Investing $6.4 million from its inaugural $54 million fund during Wiz’s seed round, Cyberstarts secured a significant stake. Fast forward four years, that single investment has ballooned into a $1.3 billion payday—translating to an astonishing 222x return on its initial capital, according to sources familiar with the firm’s performance.
But the story doesn’t stop there. Cyberstarts had already cashed out $120 million worth of Wiz shares through secondary sales, pushing its total haul from the deal to $1.42 billion. It also participated in later-stage funding rounds, contributing an additional $40 million from its opportunity fund. Those later investments are now valued at $128 million, representing a still-solid 3.2x return.
Industry insiders have been quick to call this one of the most profitable early-stage cybersecurity bets ever made. “Cyberstarts is going to have one of the best returning funds in VC history,” Shai Goldman, partner at Next Wave NYC, posted on X. “This investment was done out of their inaugural fund, a good reminder that Fund 1 can be amazing one to back as a limited partner.”
Founded by Gili Raanan, a former Sequoia general partner known for leading the firm’s Israeli investment strategy, Cyberstarts was never an ordinary emerging VC player. Its $54 million debut fund, closed in 2018, has already notched a 26x multiple on limited partner capital—without even counting future exits still on the horizon. One of those could be Island, another cybersecurity startup that’s reportedly raising at a $4.5 billion valuation.
While Cyberstarts pulled off a historic return, it wasn’t the only firm to strike gold in this deal. Index Ventures, which owns a 12% stake in Wiz, is reportedly set to make over $3.8 billion once the acquisition closes, according to Reuters.
For the cybersecurity startup sector, Wiz’s blockbuster sale underscores just how valuable these companies have become in a digital world riddled with threats. It also serves as a powerful reminder of the kind of returns possible when venture firms spot the right opportunity early—and double down when it matters most.
As Alphabet adds Wiz to its growing cybersecurity arsenal, investors across the board are reaping the rewards of believing in the startup’s mission to secure the cloud. And for Cyberstarts, this could go down as one of the most legendary wins in venture capital history.
