Wiz is facing a $200 million lawsuit from investors in Raftt, an Israeli startup whose technology the plaintiffs say Wiz used after presenting the arrangement as an acquisition. The suit, filed Monday in Tel Aviv District Court, alleges that investors were left out of a deal that benefited Raftt’s founders and transferred its technology to Wiz.
The complaint concerns a transaction publicly described in December 2023 as a multi-million-dollar acquisition. The plaintiffs say Wiz instead paid $15 million directly to founders Gal Sherf and Roy Yarkhi, hired Raftt employees and incorporated its core technology without buying the company or compensating its shareholders.
The investors characterize the arrangement as an “acquihire,” a deal focused on recruiting a company’s team. They allege that the structure avoided a formal acquisition and prevented them from sharing in the value they say Raftt’s technology created. The lawsuit calls the direct payment a “civil bribe,” wording that reflects the plaintiffs’ allegation.
Wiz Hit With Claims Over Raftt Technology
Raftt was founded in late 2020 and developed technology for a next-generation development environment. It raised $5 million at a $16 million valuation, with Aleph and Cardumen leading the investment round and angel investors also participating.
The complaint says Raftt’s technology became the foundation of Wiz Code, one of Wiz’s flagship products. Plaintiffs argue that if the product represents roughly a third of Wiz’s current value, the financial consequences could reach billions. That estimate is conditional, and the source does not report a court finding on the product’s value or ownership.
The investors accuse Wiz, Sherf and Yarkhi of breach of contract, breach of fiduciary duty, misrepresentation, misappropriation of trade secrets, copyright infringement and false advertising. They also allege that the founders received direct payments and stock options now worth around $40 million, while transferring their Raftt shares to a third party without compensation.
The plaintiffs say those steps effectively nullified their holdings. Wiz has rejected the lawsuit’s premise. The company said it viewed the case as an opportunistic claim and expressed confidence that it would prove baseless, adding that Raftt’s founders were being targeted.
The filing also alleges that Yarkhi accessed Raftt’s servers without authorization after suspicions emerged and deleted hundreds of emails and documents related to the transaction. According to the plaintiffs, recovered communications describe discussions with Wiz, payments to the founders and plans to use Raftt research and development within Wiz.
Investors Seek $200 Million in Damages
The complaint further says Wiz filed a United States patent application based on Raftt intellectual property while Sherf and Yarkhi remained Raftt directors. It alleges that Raftt employees were listed as inventors and that the technology was incorporated into Wiz’s product suite.
The suit points to public comments by Wiz executives about the transaction. The plaintiffs say co-founder Assaf Rappaport described an acquisition and integration of Raftt’s technology in media interviews. Wiz chief technology officer Ami Lutwak described it as a strategic acquisition that would turn Raftt’s product into a Wiz-branded offering within months.
The case adds to coverage of startup founders facing investor lawsuits, though the complaints concern separate companies and allegations. Other Grit Daily reporting has examined entrepreneurs building education startups and regional efforts to support new ventures.
The Raftt investors, represented by attorneys from ERM Law and Pearl Cohen, are asking the court to prohibit further use of the disputed technology and award $200 million in damages. They warn the dispute could affect how early investors assess startup transactions. The court has not ruled on the allegations.
