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This week, Google finalized its monumental $32 billion acquisition of the cybersecurity firm Wiz, marking not only the largest acquisition in Google’s history but also the most substantial venture-backed startup acquisition ever.

For the most recent installment of TechCrunch’s Equity podcast, Rebecca Bellan, Sean O’Kane, and I hosted Shardul Shah, a prominent partner at Index Ventures, Wiz’s leading shareholder. Shah shared insights into his long-standing relationship with Wiz, which predates the company’s inception, as he had previously supported Adallom, the prior venture of Wiz founders Assaf Rappaport, Ami Luttwak, and Roy Reznik.

Our conversation with Shah also delved into his perspective on what made Wiz such an attractive acquisition, and his reaction when Wiz initially declined Google’s earlier acquisition proposal.

Shah stated, “It’s no surprise that Wiz stands out. The company is strategically positioned at the convergence of three significant growth drivers: artificial intelligence, cloud computing, and security expenditures.”

Below is an edited, condensed version of our discussion. Shah playfully began by suggesting that labeling the acquisition as merely one of our ‘deals of the week’ might have been an understatement.

Shardul Shah: This acquisition, in my opinion, deserves to be recognized as the deal of the year or even the decade, certainly not just the week. Could we revise that? Thank you.

Nonetheless, its significance to the industry is profound. This transaction represents the largest venture-backed acquisition in history.

Rebecca Bellan: Yes, we can certainly address that during post-production.

Shardul: More importantly, Wiz’s success is no accident. It perfectly aligns with three major industry trends: AI, cloud, and security investments. These elements are crucial in the current AI era, where every workload requires robust security. We are extremely proud to have been the company’s largest shareholder. And indeed, I believe it’s, at minimum, the deal of the month.

Rebecca: Could you tell us about the timeline? When did your initial investment in Wiz occur? This outcome, I imagine, is precisely what investors aspire to achieve.

Shardul: It feels like either six or sixteen years, a question we often ponder internally. Approximately a decade ago, I joined the board of Adallom, the initial venture by Assaf, Roy, and Ami. This gave us a direct view into their decision-making process, how they cultivated trust, and how their approach evolved.

Assaf contacted me on my birthday when he launched Wiz, and I subsequently joined the board during their seed funding round.

Anthony Ha: While we’ve previously discussed this acquisition on the show, given that Wiz isn’t a consumer-facing entity, some listeners may be unfamiliar with it. Could you elaborate on what, beyond its position at the nexus of crucial industries, made Wiz such an attractive investment and, ultimately, a compelling acquisition target?

Shardul: Our fundamental principle at Index is to prioritize people. I genuinely believe that the essence of this acquisition lies in its people. Assaf is an exceptional leader, adept at making sound judgments with remarkable intuition for both individuals and market dynamics. His co-founders, Ami and Yinon [Costica], often present contrasting viewpoints — Ami is forward-looking, while Yinon is intensely focused on the present. Assaf possesses the unique ability to discern which perspective should guide decisions at any given moment. Roy, on the other hand, is a master of execution.

Collectively, they fostered an environment and culture built on trust, enabling them to rapidly develop a platform from its inception and challenge established categories with unparalleled velocity.

Sean O’Kane: There’s an interesting backstory – particularly entertaining for us, as we pressed them on it at Disrupt a few years ago – concerning Google’s initial approach, from which [Assaf] ultimately withdrew. In such a situation, did that experience feel like a validation for you, having identified someone you deeply trust and who was prepared to decline a significant, albeit smaller than today’s, acquisition offer that many might have found daunting?

Shardul: Not really. Part of it is likely due to my irreverent nature, where external validation holds less weight, notwithstanding my slight insecurity about you referring to this as merely the ‘deal of the week.’

At one juncture, I conveyed to the founders that I believed in their potential perhaps even more than they believed in themselves. My inaugural blog post for Index, titled “Learning to Say No,” was actually aimed at the Audible founders. When entrepreneurs make choices, one should trust the process and their decision-making framework, rather than focusing solely on outcomes or the role of chance in their validation.

Rebecca: How crucial was it for Wiz, in this acquisition, to gain Google’s resources—including funding, cloud access, and other assets—while simultaneously preserving its distinct leadership and identity?

Shardul: To elaborate for the audience, Wiz specializes in securing cloud infrastructure and production code. A significant portion of their clientele belongs to a ‘zero critical club,’ indicating they possess the insights to effectively prioritize and address security concerns. Google’s vast resources—its infrastructure and AI talent—will empower Wiz to expand its capabilities in this area, all while sustaining its established culture of trust and teamwork.

Anthony: Significant acquisitions can have multiple forms of impact. They can fundamentally reshape the acquiring company, or they can catalyze transformation within the broader startup ecosystem by generating substantial wealth for many individuals, potentially fostering entirely new industries and ventures.

Shardul: I believe its primary impact is inspiration. It ignites a renewed sense of what’s achievable for entrepreneurs worldwide. That’s truly remarkable, isn’t it?

I am immensely proud that this investment will positively alter the lives of numerous individuals, which is both significant and gratifying. However, I believe the greater importance lies in the talent, expertise, and ambitions of entrepreneurs. We eagerly anticipate witnessing the boundless potential of the next generation.