Silicon Valley venture capital firms are facing one of their biggest gains in years if Google's parent company Alphabet completes the planned purchase of the cybersecurity startup Wiz for a record-breaking 23 billion US dollars.

Some of the earliest investors of Wiz, including Sequoia Capital, Index Ventures, and Insight Partners, could each earn billions of dollars if the deal goes through, according to insiders.

This acquisition would represent a rare highlight for venture capitalists, whose regular paths to returning money to their investors have been severely restricted in recent years. However, insiders warned that the deal has not yet been finalized and could still fall through at any time.

A conclusion of the deal would set a record for the largest acquisition of a venture capital-backed company, according to data provider PitchBook.

Meta – the parent company of Facebook – previously held the record with the $19 billion acquisition of WhatsApp in 2014. Adobe's planned purchase of Figma for $20 billion, also backed by Sequoia and Index, failed last year due to antitrust concerns.

Wiz, founded four years ago by veterans of the Israeli military who previously sold a start-up to Microsoft, helps companies secure programs in the cloud. This has led to a revenue increase as businesses increasingly move software and data online.

Cybersecurity for businesses is an ever-relevant topic, as attackers constantly find new ways and the game never ends," said a former investor in the company. "Wiz took advantage of the migration of businesses to the cloud and developed methods to prevent threats there.

Index Ventures is the largest shareholder of Wiz with more than 12 percent, which corresponds to a value of over 2.7 billion US dollars at the current discussion price.

Sequoia Capital and Insight Partners each hold approximately 10 percent and 9 percent of the four-year-old company, respectively, which would bring them payouts of about 2.3 billion USD and 2 billion USD.

The other early investor in Wiz, the Israeli fund Cyberstarts, owns about 4 percent of the company after investing between 6 and 7 million USD in the seed funding round. Its potential profit is about 920 million USD – a sum that could have been higher if the fund had not previously reduced its initial 10 percent stake.

Although these funds have larger stakes in other start-ups, returns from Wiz stand out particularly and come within a relatively short investment period.

All four investors joined Wiz before the company reached its first $1 million in revenue for the year. Wiz's annual revenue growth rose to $100 million within 18 months of its launch in 2020 and continued to grow to a current rate of about $500 million.

Here is the translation of the heading:

"Wiz last raised $1 billion from investors such as Andreessen Horowitz, Lightspeed Venture Partners, and Thrive in May at a valuation of $12 billion. This valuation is expected to double within a few months.

Here is the translation of the heading to English:

"The CEO of Wiz, Assaf Rappaport, and the co-founders Ami Luttwak, Yinon Costica, and Roy Reznik are also facing significant payouts. Each of them owns about 10 percent of the company, which would make them multi-billionaires upon a successful deal.

Representatives of Wiz as well as Index, Sequoia, Insight, and Cyberstarts declined to comment. Previously, The Information reported on the potential returns.