Unknown American VC Firm Apparently Looking To Acquire NSO Group, Limit It To Selling To Five Eyes Countries

from the which-would-be-a-huge-improvement dept

NSO Group -- the embattled, extremely controversial Israeli phone malware developer -- finally has some good news to report. It may have a white knight riding to its rescue -- a somewhat unknown American venture capital firm that could help it pay its bills and possibly even rehabilitate its image.

Integrity Partners, which according to its website deals with investments in the fields of mobility and digital infrastructure, is managed by partners Chris Gaertner, Elad Yoran, Pat Wilkinson and Thomas Morgan.

According to the document of intentions, they will establish a company called Integrity Labs that would acquire control of NSO. It would also stream $300 million to the firm, in order to rebuild the company.

It's not all good news, at least not at the outset. The VC firm had pledged to lobby the US government on NSO's behalf to get the recent blacklist lifted, which means NSO would once again be able to purchase US tech solely for the purpose of developing exploits to use against that tech. If Integrity Partners has any interest in remaining true to its name, it should probably backburner this effort until it has engaged in some reputation rehabilitation.

Fortunately, it appears the VC firm is also interested in getting NSO back on the right track. Following neverending reports of NSO exploits being used to target journalists, political opponents, ex-wives, dissidents, and religious leaders, the government of Israel drastically reduced the number of countries NSO could sell to.

Integrity Labs aims to limit that list even further.

Instead of the current 37 clients, the company will reduce its sales to only five clients: the Five Eyes Anglosphere intelligence alliance of New Zealand, the United States, Australia, Great Britain and Canada. The company would initially focus on defensive cyber products as part of its rebranding effort.

With these restrictions in place -- and the United States on the preferred customer list -- it should be pretty easy to get the blacklist lifted. It's not that none of these countries would ever abuse malware to engage in domestic surveillance, but it's a far better list of potential clients than the one NSO had compiled over the last several years, which included a number of known habitual human rights abusers.

But there are still reasons to be concerned. Much of what happens to NSO after this acquisition occurs will still be shrouded in secrecy. There may be a claimed focus on defensive tech, but offensive exploits have always been NSO's main money makers and it will be much more difficult to remain profitable without this revenue stream.

Then there's the chance NSO will enter into a partnership with a different company that may not have the same altruistic goals, which means the malware developer will be able to continue limping along as the poster child for irresponsible sales and marketing. And the market for powerful malware will continue to exist. It will just end up being handled by companies that have remained mostly off the world press radar.

Also, there's the fact that there's very little information about who "Integrity Partners" actually is. While the firm's website lists its partners -- all of whom mention their military experience -- there is no evidence of a portfolio, or any evidence of previous investments. While the firm is listed in Crunchbase (the main database tracking VCs and startups), it shows no investments, and only mentions a single fund the firm has raised... for $350,000. It seems unlikely that that's enough to buy NSO Group.

For now, NSO's financial well-being and reputation are in tatters. The company cannot meet its debt obligations without outside help and its ruinous months-long streak of negative press present challenges even a timely influx of cash may not be able to reverse. But if it can rebrand and retool to provide defensive tech to a very short list of customers it may be able to survive its precipitous plunge into the "Tech's Most Hated" pool.

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Filed Under: five eyes, malware, pegasus, spyware, surveillance
Companies: integrity partners, nso group


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  1. identicon
    Anonymous Coward, 11 Feb 2022 @ 7:29am

    Also, there's the fact that there's very little information about who "Integrity Partners" actually is.

    Given their intended client list a TLA starting with C comes to mind.

    link to this | view in thread ]

  2. icon
    Aaron Walkhouse (profile), 11 Feb 2022 @ 8:11am

    Re:

    Given their focus on integrity a country starting with C also comes to mind. ; ]

    link to this | view in thread ]

  3. icon
    That One Guy (profile), 11 Feb 2022 @ 8:26am

    'Now that we own the company about your contacts/records/tech..'

    A group with a whopping one previous entry on their portfolio for a deal under half a million swoops in to buy out a company riddled with rot and scandal, and without much to go off of regarding the group other than vague details?

    Oh yeah, that doesn't seem suspect at all.

    link to this | view in thread ]

  4. identicon
    David, 11 Feb 2022 @ 8:56am

    All together now:

    What could go wrong with that?

    link to this | view in thread ]

  5. identicon
    Pixelation, 11 Feb 2022 @ 9:12am

    Mission creeps

    Only five eyes, we promise. Okay, only nine eyes, really. Okay, okay, fourteen eyes, but this time we really, really mean it!

    link to this | view in thread ]

  6. identicon
    Anonymous Coward, 11 Feb 2022 @ 10:57am

    People seem a lot more suspicious of the fact that this firm is "new" than is really warranted. Plenty of suspicion is warranted for what they're trying to acquire of course, but there's really nothing unusual about the lack of history.

    Historically, nearly all venture partnerships were formed as essentially single purpose firms, created to acquire a stake in maybe 1-5 entities, realize a profit through various means, and then dissolve the partnership to cash out their stakeholders on a more or less defined timeline. It is only in the last 10-20 years that semi-permanent firms, with more open-ended investment goals, timelines, and fundraising, really became relevant. And while the new guys certainly dominate the current public perception of venture capital, and may possibly have eclipsed the rest in terms of aggregate investment value, traditional single purpose firms still represent a majority of deals in the space. There's nothing unusual or suspicious about the (lack of) investment history here.

    link to this | view in thread ]

  7. icon
    That Anonymous Coward (profile), 11 Feb 2022 @ 1:19pm

    Re: 'Now that we own the company about your contacts/records/tec

    When I saw unknown VC I thought no one knew and my first thought was Palaintar.

    link to this | view in thread ]

  8. icon
    That Anonymous Coward (profile), 11 Feb 2022 @ 1:22pm

    Humans, still believing the fairy tale that they would never ever, double pinky promise, use it in unapproved ways.

    It is not when will be be abused, it will be will we ever find out because 'National Security'.

    link to this | view in thread ]

  9. identicon
    Bobvious, 11 Feb 2022 @ 1:51pm

    Re: Mission creeps

    5 eyes good, 14 eyes better. Got it.

    link to this | view in thread ]

  10. icon
    Mike Masnick (profile), 11 Feb 2022 @ 2:00pm

    Re:

    That may be true of certain private equity firms, but not VC.

    link to this | view in thread ]

  11. identicon
    Anonymous Coward, 11 Feb 2022 @ 2:05pm

    Used for defense? So, they will find vulnerabilities and push to get them patched instead of exploiting them? Wow, that's great!

    link to this | view in thread ]

  12. icon
    BG (profile), 14 Feb 2022 @ 1:04am

    Integrity Partners?

    Yeah, I'm gonna go out a limb here and say that name is about as believable as Honest Joe's Pre-owned Cars.

    link to this | view in thread ]

  13. icon
    That One Guy (profile), 14 Feb 2022 @ 1:48am

    Re: Integrity Partners?

    If someone feels the need to tell/remind you about how honest they are, especially if that's one of the first things coming out of their mouth...

    link to this | view in thread ]


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