Google’s cybersecurity deal spins tiny investment into $4 billion windfall

Subscribe to enjoy similar stories. Shardul Shah got the call he had been waiting for on his 37th birthday in January 2020. A promising Israeli cybersecurity founder that he had been asking for years to launch a company was in need of funding.

“It’s time," the voice on the other end of the line said. Shah kicked in $3.5 million on behalf of Index Ventures. Flash forward five years and that original seed money earned a 250-fold return this week, turning into an $875 million stake, when Alphabet’s Google agreed to buy Wiz for $32 billion.

And Index Ventures didn’t stop at its first check. It put more money in Wiz during every subsequent funding round, making it the startup’s largest outside shareholder with a 13% stake. In total, Index Ventures has turned its $245 million investment into $4.3 billion.

Success stories such as these were once a dime a dozen during the go-go years of Silicon Valley, when massive startup exits dominated the headlines and made being a venture capitalist one of the hottest jobs in finance. These days, the initial public offering market is dreary. Prized startups such as Stripe and SpaceX have chosen to stay private for over a decade, putting their investors in a perpetual holding pattern as they await a chance to cash out.

Regulators, meanwhile, have become more cautious about blessing acquisitions. Google’s Wiz deal still needs regulatory approval from the Trump administration, which has signaled that it intends to maintain tough merger-oversight guidelines. The review process itself could take years to conclude.