American investment company buys spyware developer Paragon

Israeli spyware developer Paragon has been acquired by American investment firm AE Industrial Partners. The deal is valued at $500 million, with the potential to grow to $900 million if the business grows.

Key facts about the deal

• Origin and technology:
  Founded by former Israeli intelligence officers, Paragon rose to prominence in 2021 with its Graphite product, which allows it to hack messaging apps such as WhatsApp, Signal, Facebook Messenger, and Telegram. The tool has been compared to NSO Group’s notorious Pegasus program.
• US cooperation:
  In October 2024, Paragon signed a $2 million contract with the US Immigration and Customs Enforcement. The company has established itself as an “ethical” developer of spyware, avoiding cooperation with authoritarian regimes. This allowed Paragon to receive recognition from the US administration as a “trusted supplier”.
• Plans after the transaction:
  The agreement with AE Industrial Partners will open up new opportunities for Paragon in the US market, strengthening its position as a key player in the field of cybersecurity. The company will continue to operate in Israel, but will export its technologies to the US.

The acquisition of Paragon highlights the growing interest in Israeli companies in the field of cybersecurity, and also demonstrates the US strategic desire to control advanced technologies used for intelligence.