The world's largest cryptocurrency exchange company Coinbase announced today that it has acquired Israeli cryptographic and key management and protection company Unbound Security. No financial details were disclosed but Unbound Security has raised $40 million to date and its valuation when it completed its most recent financing round last year was $160 million, according to PitchBook. Estimates are that Coinbase is paying hundreds of millions of dollars for Unbound Security.
Coinbase also announced that the acquisition of Unbound Security will serve as a basis for the establishment of an R&D center in Israel, which the US company said it expects to grow significantly over the years into "one of the world's sophisticated technology centers."
Unbound Security has 75 employees including 50 at its Israeli offices in Petah Tikva. Coinbase will begin operations in Israel in Petah Tikva but Unbound Security cofounder and CEO Prof. Yehuda Lindell said, "Coinbase is an interesting organization which doesn't believe in head offices but working from home. Despite the difficulties in recruiting developers in Israel, Coinbase is bringing a big name and so like Apple and Google have no problems in hiring people in Israel, so Coinbase can also do that."
Lindell founded Unbound Security with Prof. Nigel Smart and VP R&D Guy Peer in 2015.
Unbound Security uses multi-party computation (MPC) to protect various types of encrypted keys, and passwords that allow access to encrypted cryptocurrency assets. The situation today is that the theft of a cryptocurrency key can result in the theft of cryptocurrency assets. MPC based technology can create a mechanism for additional protection through encrypted data kept in several places and only through cooperation of several entities can access to cryptocurrency assets be obtained. Unbound Security sells its product to large enterprises and it is now unclear whether it will continue to work with other customers or just Coinbase.
On the decision to sell the company, Lindell said, "This was a very big opportunity for us to bring a deep technology to the world and solve a genuine problem. With the strength of Coinbase behind us, we can make a significant impact."
Unbound Security's investors include Innovation Endeavors, Citi Ventures, BlueRed, and Ohad Finkelstein.
Published by Globes, Israel business news - en.globes.co.il - on November 30, 2021.
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