Full Breakdown
Raftt Systems Files $200 Million Lawsuit Against Wiz Over Alleged Misrepresentation
2/11/2026, 12:15:18 AM
Allegations of Misrepresentation and Unauthorized Use of Technology
Israeli startup Raftt Systems Ltd. has initiated a NIS 200 million lawsuit in the Tel Aviv District Court against cloud security company Wiz, claiming that Wiz misrepresented the acquisition of Raftt and unlawfully utilized its technology without compensating its investors. The lawsuit, filed on February 9, 2026, asserts that Wiz publicly announced the acquisition in December 2023, suggesting a multi-million dollar deal, while Raftt contends that no formal acquisition occurred, and no payment was made to its shareholders.
Raftt alleges that instead of a legitimate acquisition, Wiz orchestrated an "acquihire" to recruit Raftt's employees and leverage its core technology, which is foundational to Wiz's product, Wiz Code. The lawsuit claims that Wiz paid approximately $15 million directly to Raftt's founders, Gal Sherf and Roy Yarkhi, in what Raftt describes as a "civil bribe," circumventing the need for a formal transaction and avoiding profit-sharing with investors.
Background and Context
Founded in 2021, Raftt developed tools for software developers and raised $5 million at a $16 million valuation, backed by venture capital funds including Aleph and Cardumen. The lawsuit highlights that Raftt's founders were in discussions with Wiz while still serving as directors at Raftt, allegedly planning the transfer of employees and technology without board approval. Raftt claims that the founders misled investors about the company's operational status, stating that Raftt had ceased operations while they negotiated with Wiz.
Key Claims and Legal Demands
Raftt's lawsuit includes several serious allegations against Wiz and its founders, including breach of contract, breach of fiduciary duty, misrepresentation, misappropriation of trade secrets, and copyright infringement. The plaintiffs argue that the technology behind Wiz Code was developed at Raftt and that Wiz filed a U.S. patent application based on this intellectual property shortly after the founders joined Wiz. Raftt is seeking not only financial damages but also a court ruling to affirm its ownership of the rights to Wiz Code and related patents, as well as an injunction against further use of the disputed technology.
Wiz's Response
Wiz has denied the allegations, asserting that the lawsuit is an attempt to exploit the company's success. In statements reported by Israeli media, Wiz expressed confidence that the claims would be dismissed, framing the lawsuit as an opportunistic move by Raftt's founders. Wiz's co-founder, Assaf Rappaport, has publicly stated that the company is saddened by the lawsuit, suggesting that it targets young entrepreneurs who are being misled.
Implications for the Startup Ecosystem
The lawsuit raises significant concerns about the potential ramifications for Israel's startup ecosystem. If the court finds in favor of Raftt, it could set a precedent that allows companies to transfer teams and intellectual property without compensating early investors, potentially deterring future investments in startups. The outcome of this case may have lasting effects on how acquisitions and talent transfers are conducted within the tech industry.
Verbatim Quotes
- “We are sad to see that this time the founders of Raftt - young and talented entrepreneurs - are being harmed by this and are a target.” — Assaf Rappaport, Co-founder of Wiz.
