Cybersecurity startup Wiz ponders SentinelOne acquisition
The potential bid comes as the $4.9bn vendor has been struggling to become profitable
Cybersecurity startup Wiz is considering a potential bid for SentinelOne following reports that the cybersecurity vendor was looking at strategic options.
Reuters is reporting that the $4.9bn-company has struggled to become profitable, with clients slashing their information technology spending amid an uncertain economy and sticky inflation.
People familiar with the matter earlier last week said that SentinelOne was exploring options that could include a sale.
"We consistently evaluate potential opportunities that will support our business growth...SentinelOne has a strong cybersecurity offering," Wiz's spokesperson Rachel Ratchford told Reuters.
SentinelOne has hired investment bank Qatalyst Partners to advise on discussions with potential acquirers, including private equity firms, the sources said.
The deliberations follow an 80 per cent drop in its market capitalisation over the past two years, which have made the company a target for a private equity takeover.
However, during a recent interview with CRN US, SentinelOne co-founder and CEO Tomer Weingarten pointed to numerous major growth opportunities for the vendor, including around bringing generative AI to its product portfolio.
In April, SentinelOne became one of the first cybersecurity vendors to unveil a new product powered by large language model technology with the debut of its Purple AI threat hunting tool.
Weingarten said at the time that it was no coincidence that SentinelOne was able to unveil a truly powerful tool applying generative AI to cyber defence - and do so more quickly than others.
"We were talking about AI, and we were integrating neural networks into our product, for years," he told CRN.
Weingarten also pointed to massive opportunities for SentinelOne and its partners in cloud security, including through the vendor's exclusive partnership with Wiz, a fast-growing startup in the segment.
"We have one of the most robust channel ecosystems," he said.
"If you couple what the MSP ecosystem can do with a product like Wiz's, and what the overall channel distribution that we have can now do with a joint offering then you also start to understand that it's a force multiplier for [partners] as well."
Ultimately, "I think it's very hard to compete against what we have jointly together," Weingarten said.
Revenue for the first quarter of SentinelOne's fiscal 2024, ended April 30, grew 70 per cent year over year to $133.4m.
"The deal (to acquire SentinelOne) would broaden Wiz's platform into endpoint security and bring strong cloud and identity security solutions from SentinelOne," D.A. Davidson analyst Rudy Kessinger said.
In March 2023, Wiz and SentinelOne announced an exclusive partnership to deliver end-to-end cloud security.
SentinelOne, which was launched in Israel in 2013, has more than 10,000 customers as of January 31, 2023, which include major companies and the US government.