Paragon, Israel’s top cybersecurity firm, sold to US investor for over $500M

Paragon, one of Israel’s top offensive cybersecurity firms and a major competitor to NSO Group Technologies has been sold to a U.S. investment firm for over half a billion dollars.

Paragon’s founders and operations

Founded by former Israeli Prime Minister Ehud Barak and former 8200 unit commander Ehud Schneorson, Paragon has developed the Graphite spyware, which has been sold to law enforcement agencies in Israel, Europe, and the U.S.

Despite the sale, Paragon will remain based in Israel and continue to manage its operations from there. The buyer, Red Lattice, a U.S. cybersecurity firm owned by AE Industrial Partners, specializes in aviation, defense, and homeland security, with close ties to U.S. security agencies.

Ehud Schneorson, the former commander of Israel’s NSA equivalent, known as Unit 8200, who are responsible for collecting signal intelligence (SIGINT) and code decryption.

The other cofounders of Paragon Solutions, including CEO Idan Nurick, CTO Igor Bogudlov, and Vice President of Research Liad Avraham, are also former Israeli intelligence officers. The company is backed by a major U.S. investor, Boston-based Battery Ventures.

According to industry sources cited by Forbes, Paragon’s technology allegedly enables users to remotely infiltrate encrypted instant messaging platforms, including WhatsApp, Signal, Facebook Messenger, and Gmail.

New phase in US-Israel cyber cooperation?

The sale of Paragon is seen as part of a broader shift in cybersecurity relations between Israel and the United States. Under the Biden administration, the U.S. has emerged as a dominant player in offensive cybersecurity, actively distancing itself from companies involved in controversial spyware activities.

Role of Red Lattice in acquisition

Red Lattice, a U.S.-based firm, acquired Paragon in a deal that is expected to unfold in two payments, with the total value potentially exceeding $1 billion depending on Paragon’s performance in the coming year.

Over the last few years, the U.S. has developed its own cybersecurity capabilities, partly through acquisitions of Israeli firms like Cobwebs, which was sold for $200 million, and Cellebrite, which has shifted much of its operations to the U.S. following its initial public offering in 2021.