US Private Equity Giant Acquires Israeli Spyware Firm Paragon

Paragon, an Israeli firm known for developing spyware, was recently acquired by AE Industrial Partners, a major American private equity company, as reported by Israeli media.

The tech website Calcalist revealed that the acquisition deal values Paragon at $500 million, with the potential to increase to $900 million based on the company's growth. According to Globes, the initial payment of $450 million will be distributed with 20% going to the company's 400 employees, 30% to the five co-founders, and the remaining 50% to U.S.-based Battery Ventures and Israeli fund Red Dot.

First reported by Forbes in 2021, Paragon was founded by ex-Israeli intelligence officers, including Ehud Schneorson, former commander of Israel's spy agency Unit 8200, CEO Idan Nurick, CTO Igor Bogudlov, and VP of research Liad Avraham. Notably, Paragon maintains a low web presence, lacking an official site.

For those looking to provide information on government spyware, TechCrunch offers secure communication channels.

Efforts to reach AE Industrial and Paragon representatives for comments were unsuccessful. Battery Ventures declined to comment, while Red Dot did not respond.

Paragon's signature product, Graphite, has been compared to NSO Group's Pegasus and similar tools, offering capabilities to hack into apps like WhatsApp, Signal, Facebook Messenger, and Gmail. In a notable development, US Immigration and Customs Enforcement contracted Paragon for a $2 million deal, following rigorous vetting to ensure the spyware wasn't used to target U.S. residents, a concern that has previously implicated NSO Group and led to its blacklisting by the U.S. Department of Commerce.

Following a pattern seen with other Israeli spyware firms, AE Industrial's acquisition mirrors previous investments, such as Francisco Partners' 2014 purchase of NSO Group. The spyware sector has faced scrutiny over its tools' misuse, prompting regulatory actions against companies like NSO Group and Intellexa.