Zoom Video Communications, Inc. has acquired Keybase, an encryption startup funded by Andreessen Horowitz. The move comes as Zoom ($ZM) seeks to boost security; safeguard its video conferencing system; and strengthen customer trust in its global platform. Financial terms of the deal were not disclosed.
This is M&A deal number 203 that ChannelE2E has covered so far in 2020. See the complete M&A deal list here.
Zoom positioned the acquisition as a talent grab -- emphasizing Keybase's team of security and encryption engineers. That team will "accelerate Zoom’s plan to build end-to-end encryption that can reach current Zoom scalability," the buyer said.
Zoom: Addressing Video Conferencing Security Concerns
Amid booming demand for video conferencing, Zoom has faced some customer defections and pushback because of rampant security issues. The latest black eye involves hackers posting Zoom user account credentials on the Dark Web.
Rivals such as Cisco Systems WebEx and Microsoft Teams have attempted to capitalize on Zoom's security missteps -- though the rivals have been careful not to publicly bash the security lapses. Moreover, Verizon jumped into the video conferencing market and acquired Bluejeans Network.
Zoom CEO and founder Eric Yuan has taken multiple steps in recent weeks to address the security concerns and further safeguard the company's video conferencing system. The company in April 2020 created a security advisory panel -- which features former Facebook Security Chief Alex Stamos. And on May 6, Zoom shared a 90-day security plan progress report status update.
Zoom has also worked closely with legal officials and concerned customers to specifically address their security concerns. Recent progress includes an agreement with the New York Attorney General, which permits New York City schools to return to the platform.
Zoom Acquires Keybase: Executive Perspectives
In a prepared statement about the Keybase acquisition, Yuan said:
“There are end-to-end encrypted communications platforms. There are communications platforms with easily deployable security. There are enterprise-scale communications platforms. We believe that no current platform offers all of these. This is what Zoom plans to build, giving our users security, ease of use, and scale, all at once. The first step is getting the right team together. Keybase brings deep encryption and security expertise to Zoom, and we’re thrilled to welcome Max and his team. Bringing on a cohesive group of security engineers like this significantly advances our 90-day plan to enhance our security efforts.”
Added Keybase.io Co-founder and Developer Max Krohn:
“Keybase is thrilled to join Team Zoom! Our team is passionate about security and privacy, and it is an honor to be able to bring our encryption expertise to a platform used by hundreds of millions of participants a day.”
Zoom Acquires Keybase: Background and Next Moves
Krohn will lead the Zoom security engineering team, reporting directly to Yuan. Leaders from Zoom and Keybase will work together to determine the future of the Keybase product.
Keybase raised $10.8 million in Series A funding from Andreessen Horowitz in July 2015. The company initially was a PGP keyserver hobby project -- aimed at making key lookups as easy as knowing someone's username. But ahead of that 2015 funding, the company pivoted to a more ambitious goal: "To bring public key crypto to everyone in the world, even people who don't understand it." The effort involved building open source apps that anyone can use, Keybase indicated in a 2015 blog.