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