Introduction

In an astounding turn of events, the cybersecurity startup Wiz is set to make waves in the investment world following its $32 billion all-cash acquisition by Alphabet, the parent company of Google. This deal marks a significant payday for the early-stage investors who backed Wiz in its growth journey.

Major Investors' Returns

Among these fortunate investors is Sequoia Capital, a powerhouse in the venture capital landscape. According to Bloomberg, Sequoia stands to cash in around $3 billion—a staggering 25 times its initial investment in the company. While this impressive gain is noteworthy, it pales in comparison to the jaw-dropping returns being reaped by another early supporter: Cyberstarts, an Israel-based venture capital firm focused on cybersecurity.

Cyberstarts' Early Investment

Cyberstarts initially invested $6.4 million from its debut $54 million fund during Wiz's seed round in February 2020. As a result of this early belief in Wiz, the fund now holds 4.1% of the company, positioning it to realize an astonishing $1.3 billion from the acquisition. Adding to this windfall, Cyberstarts previously secured $120 million through secondary transactions involving Wiz shares, bringing their total returns to a staggering $1.42 billion—a remarkable 222 times their original investment!

Subsequent Investments

Moreover, Cyberstarts didn't stop there; they participated in Wiz's later funding rounds, investing an additional $40 million from their opportunity fund. While this subsequent investment amounts to $128 million today, offering a more modest 3.2x return, it still illustrates the firm's strategic approach to varying stages of investment.

Industry Recognition

Industry experts are already dubbing Cyberstarts' inaugural fund a historical success story. Shai Goldman, a partner at Next Wave NYC, lauded the firm's achievements on social media platform X, declaring, "Cyberstarts is going to have one of the best returning funds in VC history. This investment was done out of their inaugural fund, a good reminder that Fund 1 can be an amazing opportunity to back as a limited partner."

Cyberstarts' Leadership

Unlike typical emerging VC managers, Cyberstarts was co-founded by Gili Raanan, who previously spearheaded Sequoia's investment strategy in Israel for nearly nine years, bringing invaluable expertise to the table. The small but impactful $54 million fund has already attained a 26-fold return for its limited partners, and that's not all—there are other potential lucrative exits on the horizon, including Island, a startup reportedly eyeing a capital raise at an impressive valuation of $4.5 billion.

Conclusion

As the investment community watches closely, the story of Cyberstarts serves as a potent reminder of the transformative possibilities that can arise from early-stage investments in visionary companies. With high stakes and even higher rewards, the world of venture capital remains an exhilarating space for both investors and entrepreneurs alike!