Wiz, a New York-based cloud security company, is on the lookout for additional acquisition opportunities as it strives to reach USD 1bn in annual recurring revenue (ARR) ahead of an initial public offering (IPO), said President and COO Dali Rajic.

The executive, speaking on the sidelines of the Collision technology conference held late last month in Toronto, declined to detail the specifics it seeks in potential acquisition targets but noted they should share Wiz’s industry view. The firm isn’t just looking to acquire technologies, but also “the intelligence of the people. The cultural fit is very important,” he said.

In April, the four-year-old company announced it acquired Gem Security, a cloud detection and response company, for an undisclosed amount. Late last year, it purchased Raftt, a cloud platform for developer collaboration, for terms that also went undisclosed. More recently, the company reportedly was in talks to acquire Silicon Valley-based cybersecurity firm Lacework at a steep discount, but the deal died during due diligence. Last summer, Wiz reportedly considered acquiring SentinelOne  [NYSE:S], which had a USD 5bn market cap at the time, but a deal did not materialize.

Any potential M&A opportunity must compete with what Wiz’s product team can develop internally, Rajic noted. “What do [they do] to accelerate our timeline?” he asked. The executive boasted about the strength of Wiz’s product team, which has the ability of understanding the current market but also knowing where it is heading. It is “stronger than anything I’ve seen in my career,” he said.

Raji worked for nearly five years at cybersecurity company Zscaler [NASDAQ:ZS] and more than seven years at AppDynamics, an application intelligence software firm that Cisco [NASDAQ:CSCO] acquired in 2017, according to his LinkedIn profile.

Due diligence on potential acquisitions has heightened following Wiz’s latest funding round. In May, the company raised USD 1bn at a USD 12bn valuation in a round led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital. Part of the proceeds could be used for strategic acquisitions, the company said in a blog post announcing the capital raise.

Acquisitions could help Wiz achieve its self-imposed goal of having USD 1bn in ARR in about five years, Raji explained, noting that the company ended 2023 with an ARR of USD 350m. “We are a very ambitious group, and that goal is not too far in the distant future,” he said.

Reaching an ARR of USD 1bn is one of the milestones Wiz has set itself before considering launching an IPO, he said. The company also needs to achieve complete control of its gross margins and operational profit, as well as be able to map growth out three to four quarters in advance, he added.

An area in which Wiz seeks to grow is artificial intelligence (AI)-powered remediation, or the use of AI to make suggestions for quick vulnerability fixes, Rajic said. As more businesses bet that data models are going to fuel their revenue lines, “Who has access to [the data]? And … can you prevent data from leaking or being attacked?” the executive asked.

In April, Wiz announced in a blog post that it now uses Amazon’s [NASDAQ:AMZN] Amazon Bedrock to quickly analyze metadata from risks identified in cloud environments to generate effective remediation recommendations, which “can minimize [the] mean time to remediate by generating easy-to-use, copy-paste remediation steps that can be directly implemented into the tool of [customers’] choice.”

Amazon Bedrock is a fully managed service that offers a choice of high-performing foundation models – or AI-neutral networks trained on mountains of raw data that can be adapted to accomplish a broad range of tasks – from leading AI companies like AI21 Labs, Antrophic, Cohere, Meta, Mistral AI and Stability AI through a single application programming interface, according to its website.

Demand for Wiz’s cloud security platform is strong in Europe and Asia-Pacific and Japan, noted Rajic, who said he recently travelled to Europe to meet partners and customers. “Geographic expansion is massive for us,” he said.

Wiz also sees the public sector as a viable growth market as the US federal government prepares to modernize its cybersecurity tools, the executive added. “The beauty about that market is they’re really rushing to cloud commitments that are … above and beyond anything they’ve done historically because it usually had been a traditional, conservative, regulated footprint inside of data centers.”