Spies, billionaires and paid VPNs: the disturbing story of Kape Technologies and an ecosystem with a very dark side
Imagines you want to start using a VPN. You Google which ones are the best and come across articles like this one that seem to make it clear that ExpressVPN, CyberGhost, and Private Internet Access are the best. The theme seems complete and some of those services sound familiar to you, so you jump in and start using one of them.
What is the problem? That both those who recommend these services and their providers belong to the same group. They are called Kape Technologies and They have been buying platforms of this type and VPN comparison websites for years to promote themselves. They are an example of a problem that affects an industry with many shadows and that makes using a VPN network to protect our connections a little scary.
It all started with Teddy Sagi and Crossrider
The history of Kape Technologies is certainly striking. Before changing his name in 2018, the company was called Crossrider. Behind its creation in 2012 is the Israeli billionaire Teddy Sagi, who among other things owns the famous Camdem market in London.
Sagi has a controversial track record. To begin with, he was in prison for using inside information in the 90s. In 1999 he founded Playtech, an online gambling company listed on the London Stock Exchange and founded together with Koby Menachemi, who in turn worked as a developer on the so-called ‘ Unit 8200 ‘. What is Unit 8200? Well, a unit that works for the Israel Defense Forces in the field of code-breaking and intelligence. Some call it “the Israeli NSA”.
Sagi – who appears in the Panama Papers and this week escaped an attempt on his life – ended up changing his third, and in 2012 he founded Crossrider. In 2015 researchers from Google and Stanford University published a report (PDF) in which they discovered how the ‘ad injection’ technique worked in the world of online advertising: with it it was possible to intercept the traffic of the content that came to the user to put through advertising and popups that seem to come from nowhere.
Crossrider ended up getting a bad rap for creating malware and adware products that were reported by Microsoft, Symantec or Malwarebytes (also at least one other time), and as they then explained in Forbes, was one of the companies most involved in this type of activity. You may remember the case more if we mention Superfish, the malware that was pre-installed on Lenovo computers.
The company changed its focus: after specializing in optimizing internet traffic, it moved to the advertising market to definitely focus on the cybersecurity segment. One of the turning points was the purchase of Cyberghost VPN in March 2017 for 9.2 million euros.
It was then that the strategy of this company was being defined. As explained on RestorePrivacy, Sagi’s company changed its name from Crossrider to Kape Technologies for, as admitted by its own CEO, Ido Erlichman, distancing oneself from “past activities”.
Acquisitions followed. Kape bought Zenmate for $ 5 million in October 2018, but from there the stakes went up. They acquired Private Internet Access (PIA) company for $ 127 million in September 2020, and have recently done the same by acquiring Express VPN for $ 936 million.
Before, in March 2021, Kape acquired Webselenese, a media publishing group focused “on security and privacy content for consumers.” The operation, which was closed for $ 149.1 million, had a curious side: it did not mention vpnMentor, one of the theoretical websites that belonged to that group and that is dedicated to carrying out analysis and sharing of VPN services.
The data is significant because a few days ago vpnMentor revealed how “these 7 companies secretly own dozens of VPNs” and mentioned the specific case of Kape Technologies along with other groups such as j2 Global or Actmobile Networks. Curiously, a screenshot that shows a Google search of this type refers to this website and in it if they recommend the services of Kape Technologies, something curious and contradictory.
Be that as it may, that acquisition “closed the circle” by turning Kape Technologies into a company that owned some of the best-known VPN platforms in the world, but also media that promoted them with those “best VPNs” lists that did not explain who was behind those selections and ratings.
It was, as some analysts explained, as if a chain like Hilton Hotels bought a platform like Tripadvisor: the recommendations of the second they would no longer be reliable.
Another website for analysis and comparison of products and services (VPNs included) from Webselenese called Wizcase made its preferences clear: ExpressVPN, CyberGhost and PIA were the ones chosen by their editors. The design and content, by the way, are certainly similar between both websites. It is the first link that we gave when starting the article, and it is one that reveals how worrying the situation is.
The suspicions that may arise with Kape Technologies’ unique track record are not the only ones in this market. Our Genbeta colleagues talked about how something similar happened with the j2 Global conglomerate, which is owner of services such as IPVanish, StrongVPN or SaferVPN, but which also owns the Ziff Davis publishing group, in which we have media such as Mashable or PCMag that have carried out hundreds of comparative analyzes of VPNs. I cook it, I eat it?