Encrypted comms company Silent Circle, half of the SGP Technologies joint venture behind the pro-privacy Android smartphone Blackphone, has just announced it’s reached an agreement to buy out its hardware partner, Spanish smartphone maker Geeksphone.
It’s expecting to close the buy out this week. Silent Circle’s acquisition of the JV will result in it taking a 100% ownership stake in SGP Technologies and the Blackphone product set. It says the buy-out will bring “operation efficiencies” and “an integrated product roadmap”.
In a news release put out today, Silent Circle also reveals it has raised $50 million to fuel its next round of growth — as it positions itself to focus more fully on the enterprise. It’s not clear if this is all new financing but we’ve asked for clarity and will update this post once we know. Silent Circle has confirmed to TechCrunch that this is all new financing.
The company adds that it will be unveiling an “enterprise privacy ecosystem”, using ZRTP cryptographic protocols, at the Mobile World Congress trade show next week, to further flesh out its enterprise strategy.
Silent Circle’s clear aim here is to step into the gap left by the marketshare demise of BlackBerry and woo business users with an integrated suite of secure enterprise communication products that better meshes with the realities of a consumerized ‘bring your own device’ business world. So basically the pitch is encrypted comms running on modern and capable mobile hardware. (The company has previously confirmed a Blackphone tablet is also incoming.)
For its part Geeksphone has various other sole hardware projects to keep it occupied post-Blackphone, including its own brand multiOS handsets, and other Firefox OS phones (albeit sales of devices running Mozilla’s mobile platform are inevitably niche). Its latest direction is a move into wearables, with a fitness band called GeeksMe coming this summer.
In May last year Silent Circle took in its first ever external funding, a $30 million round led by investors including Ross Perot Jr. and Dallas-based private investment fund Cain Capital LLC, thanks (it said) to demand for Blackphone, which runs a hardened Android fork called PrivatOS. So its investors are also evidently persuaded there is a sizable opportunity to capitalize on BlackBerry’s fall from favor.
Add to that, there is generally growing momentum for more secure mobile communications, as security continues to rise up corporate agendas in the wake of high profile leaks such as the hacking of Sony Pictures’ email last year.
Just last week it emerged that government intelligence agencies might have cracked encryption keys in SIM cards distributed by Gemalto — according to documents released by NSA whistleblower Edward Snowden — blowing a huge security hole in mobile voice communications.
Commenting in a statement, Silent Circle investor, Ross Perot Jr, flagged up these various growing security concerns. “As the nature and volume of data breaches increase, institutional trust is eroding,” he said. “There are companies that have been hacked and there are those that don’t know about it yet, which means that security in the traditional sense has failed us. With the number of employees connecting to an enterprises’ network using their own devices rapidly rising, organizations need a different solution.
“In short, in a post-Sony and Gemalto world, security breaches have been made both enterprise and personal so it’s no longer an issue affecting just the boardroom.”
“This first stage of growth has enabled us to raise approximately $50m to accelerate our continued rapid expansion and fuel our second stage of growth,” added Mike Janke, co-Founder and executive chairman of the Silent Circle Board, in another statement.
“Just under a year ago, we introduced Blackphone at Mobile World Congress. Since then, we’ve continued to develop new, privacy-first products for our integrated software suite as well as Blackphone, the first hardware device in our portfolio of privacy solutions.”
It’s unclear whether Geeksphone will continue to manufacture hardware under license to SGP Technologies. We’ve put the question to the company, and will likely get more details in Barcelona on Monday — when Silent Circle is holding a Blackphone-related press conference.
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