As Google awaits final approval for its $32 billion acquisition of Israeli cybersecurity startup Wiz, a $200 million lawsuit has been filed against Wiz in Tel Aviv District Court, alleging it misrepresented the purchase of another Israeli company, Raftt, and illegally used its technology without compensating investors.
The lawsuit, filed Monday by a group of Raftt investors, including venture funds Oasis and Cardumen as well as several angel investors, claims that in December 2023, Wiz publicly presented the deal as a multi-million dollar acquisition. In reality, they allege, Wiz paid $15 million directly to Raftt’s founders, Gal Sherf and Roy Yarkhi, in what they call a “civil bribe,” hired Raftt’s employees and incorporated the startup’s core technology without acquiring the company or compensating its investors.
According to the plaintiffs, the technology in question forms the foundation of "Wiz Code," one of Wiz’s flagship products. If the court accepts that this product constitutes roughly a third of Wiz’s current value, the financial implications could stretch into the billions.
The lawsuit alleges that instead of executing a formal acquisition, Wiz orchestrated an "acquihire" deal—commonly used to recruit talent—without informing or compensating Raftt’s shareholders. It accuses Wiz, along with Sherf and Yarkhi, of breach of contract, breach of fiduciary duty, misrepresentation, misappropriation of trade secrets, copyright infringement and false advertising.
Raftt, founded in late 2020, developed next-generation development environment technology. It raised $5 million at a $16 million valuation, led by Aleph and Cardumen, with participation from prominent angel investors.
Plaintiffs argue that Wiz, with the cooperation of Raftt’s founders, deliberately avoided a legitimate acquisition in order to sidestep higher costs and avoid profit-sharing with investors. Instead, they claim the founders received direct payments and stock options now worth around $40 million, while transferring their Raftt shares to a third party without compensation—effectively nullifying the investors’ holdings.
Adding to the controversy, the lawsuit alleges that after suspicions were raised, co-founder Yarkhi accessed Raftt’s servers without authorization and deleted hundreds of emails and documents related to the transaction. Recovered communications allegedly confirm the founders’ discussions with Wiz about the deal, the payments received and plans to use Raftt’s R&D within Wiz.
The plaintiffs also claim Wiz filed a U.S. patent application based on Raftt’s intellectual property—while Sherf and Yarkhi were still officially directors at Raftt—listing Raftt employees as inventors and rolling the technology into Wiz’s product suite.
The lawsuit singles out public statements made by Wiz executives, including co-founder Assaf Rappaport, who touted the supposed acquisition in media interviews, claiming Wiz would integrate Raftt’s technology in a unique, strategic way. In another interview, Wiz CTO Ami Lutwak described the move as a strategic acquisition meant to transform Raftt’s product into a Wiz-branded offering within months.
Filed by attorneys from ERM Law and Pearl Cohen, the suit asks the court to prohibit further use of the disputed technology and seeks financial damages totaling $200 million. The plaintiffs warn the case could set a dangerous precedent for Israel’s startup ecosystem, allowing companies to transfer teams and IP without rewarding early investors, potentially chilling future investment in startups.
In a statement, Wiz said: “When a company succeeds, unfortunately some seek to exploit that success with opportunistic lawsuits. It's sad to see that in this case, the talented young founders of Raftt are being targeted. As with past lawsuits against Wiz, we are confident this one will also prove baseless.”