Kape Technologies has acquired ExpressVPN for $936 million, marking the largest deal in the Virtual Private Network (VPN) industry to date. The popular VPN service is set to continue operating independently, similar to the other VPN brands under Kape: CyberGhost, Private Internet Access (PIA), and ZenMate.
ExpressVPN co-founders Peter Burchhardt and Dan Pomerantz will be paid $354 million in cash once the deal closes, and then $237 million in Kape shares, giving them a 14% stake in the company. The remaining $345 million will be paid in installments of 12 months and 24 months after the deal is closed.
“The ExpressVPN team is delighted to be joining the Kape Technologies family. It was essential to us that anyone we teamed up with shared our strong fundamental commitment to user privacy, and Kape has demonstrated that in spades through its family of brands,” Pomerantz said in a press release.
“With access to greater capital and resources as part of Kape, we’re excited to be able to accelerate our product development, deliver even more innovation to our users, and protect them from a wider range of threats,” he added.
ExpressVPN Joins Other VPN Giants under Kape Umbrella
Kape Technologies has previously bought three other VPN providers: CyberGhost in 2017, ZenMate in 2018, and PIA in 2019. By adding ExpressVPN to the list, Kape now has an estimate of over 6 million paying subscribers.
ExpressVPN claims it will maintain its independence despite this deal. “[We] will remain a separate service from other Kape brands, and everything you’ve come to know and love about ExpressVPN will only continue to improve,” the company said in a blog post.
Kape’s 2020 annual report says that, as of late 2020, the company retains 97% of the original PIA team, notwithstanding pre-planned exits.
ExpressVPN also clarified with TechRadar that although Kape is a London Stock Exchange-listed company, the VPN service will still be operated via a British Virgin Islands (BVI) company and subject to BVI law.
Cybersecurity Industry Experiences Continuous Growth
This Kape-ExpressVPN collaboration is only the latest in the VPN space.
Romania-based J2 Global, which owns tech publishing websites like PCMag and IGN, bought six VPN services within the span of two years: SaferVPN, Encrypt.me, IPVanish, StrongVPN, Buffered VPN, and ibVPN. Its last acquisition was in 2020.
Tech giant Google has also joined the industry by offering a VPN service as part of its Google One suite.