SAN FRANCISCO: Last week, it looked like Google was poised to snap up cybersecurity startup Wiz for US$23bil , in what would have been its largest acquisition ever.

On the night of July 22, Wiz told its employees that despite the large offer, the deal was off. The privately held company would instead pursue a public listing on a stock exchange, according to a memo viewed by The New York Times.

Wiz would continue to pursue its previously stated goal of generating US$1bil in recurring revenue before an initial public offering, Assaf Rappaport, Wiz’s CEO, wrote in the memo.

“While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” he wrote. “Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice.”

Google did not immediately respond to a request for comment. A representative of Wiz declined to comment. CNBC and Fortune reported contents of the memo earlier Monday.

If it had been completed, the splashy purchase would have injected fresh momentum into Google’s cloud-computing division and helped the company keep up with longtime rival Microsoft in cybersecurity. A growing number of businesses rely on Wiz to protect their cloud applications.

Google has never cut a check so large to buy another company, let alone a four-year-old startup like Wiz. Its biggest deal was a US$12.5bil purchase of Motorola Mobility in 2012, a company that it sold at a loss just a couple of years later.

This time around, the regulatory hurdles appeared steep.

Google has had a testy relationship with US regulators recently, with the Justice Department suing it in two separate antitrust cases meant to strike at Google’s market power. One is targeting its ubiquitous search engine and another is seeking to break up its digital advertising-technology business. A verdict in the search case is expected this summer.

Regulators under US President Joe Biden have taken a hard line against corporate consolidation. The Federal Trade Commission unsuccessfully sued to block Microsoft’s acquisition of the video game company Activision, and Amazon abandoned its US$1.7bil acquisition of iRobot after pushback from American and European regulators.

A government review of a multibillion-dollar acquisition could take more than a year and sap a company of its momentum. That would be precious time for Wiz, which has consistently touted its fast growth. The company said earlier this year that it generated more than US$350mil in annualised revenue, up from US$100mil two years earlier.

Rappaport said in his memo that all of the attention the company had gotten since news emerged of a possible Google acquisition had emboldened him to keep building a platform independently.

“The market validation we have experienced following this news only reinforces our goal,” he wrote, of “creating a platform that both security and development teams love.”

 - Ny Times