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Wiz\u2019s $32 billion all-cash acquisition by Google parent Alphabet promises a colossal payday for the cybersecurity startup\u2019s early-stage investors.<\/p>\n
The deal is a big win for Sequoia, one of the best-known VC firms, which stands to make $3 billion, about 25x the money it invested in the company, Bloomberg reported<\/a>. Despite substantial returns for Sequoia\u2019s limited partners, their percentage gains will be far less than those of another early Wiz backer: Israel-based VC Cyberstarts.<\/p>\n Cybersecurity-focused Cyberstarts invested $6.4 million from its first $54 million fund towards Wiz\u2019s seed round in February 2020. <\/p>\n Today, that fund owns 4.1% of Wiz, which means it\u2019s poised to make a whopping $1.3 billion on the deal, according to a person familiar with the firm\u2019s performance. Cyberstarts also previously sold $120 million shares of Wiz in secondary transactions, bringing the fund\u2019s total return to $1.42 billion \u2014 a remarkable 222x return on the original investment.<\/p>\n Cyberstarts also participated in Wiz\u2019s later-stage rounds, investing a total of $40 million from its opportunity fund. Those investments are now worth $128 million, a more modest 3.2x return on invested capital, a person familiar with Cyberstarts performance told TechCrunch.<\/p>\n \u201cCyberstarts is going to have one of the best returning funds in VC history,\u201d Shai Goldman, a partner at Next Wave NYC, wrote on X<\/a>. \u201cThis investment was done out of their inaugural fund, a good reminder that Fund 1 can be amazing one to back as a LP.\u201d<\/p>\n Cyberstarts wasn\u2019t an ordinary emerging VC manager when it closed its inaugural fund in 2018. The firm was started by Gili Raanan, who previously spent nearly nine years as a Sequoia general partner leading its Israel investment strategy.<\/p>\n The small $54 million fund has already achieved a 26x multiple on its limited partner capital. And that\u2019s not even counting other potential exits, such as Island, a startup reportedly raising capital at a valuation of $4.5 billion<\/a>. <\/p>\n Index Ventures, which owns a 12% stake in Wiz, is poised to make over $3.8 billion once the sale is complete, Reuters reported<\/a>.<\/p>\n<\/div>\n