ZenMate VPN has become the latest online security and privacy company to be acquired by Kape Technologies, the technology investment vehicle of Israeli billionaire Teddy Sagi. It is their second venture into the VPN market after their earlier purchase of CyberGhost VPN.
ZenMate: a free and premium VPN
ZenMate was the flagship product of ZenGuard, a business which was founded back in 2013 in Berlin. It offers a premium VPN service to subscribers at standard industry subscription rates.
It boasts of servers in more than 30 countries around the world, fast connection speeds, strong encryption, and a guarantee that it retains absolutely no user logs.
ZenMate claims to have in excess of 45 million users worldwide. However, much of this user-base is likely to be signed up for their free VPN service rather than the premium subscription model.
The free ZenMate VPN service is only available as a browser plugin and offers an extremely limited service. There are just four server locations available and connection speeds are limited to just 2MB/s making it useless for things like streaming and downloading.
On paper, ZenMate is one of the most-used VPNs in the world, but the service has been sold to Kape Technologies for just £4.2 million. This sum certainly implies that most of these users are not paying regular subscriptions. If they were, the business would certainly have been valued a lot higher.
What does Kape Technologies have planned for ZenMate?
A look into Kape Technologies suggests that one motivation behind buying ZenMate could be to take the business public.
Kape Technologies is owned by Israeli billionaire Teddy Sagi. Sagi is often referred to as being a serial floater. This is referring to his habit of buying businesses and then floating them on the stock market.
Sagi founded the gambling software developer Playtech in 1999. He made his fortune by floating it and now owns just 6% of the company.
There are also a number of other tech businesses which have passed through his ownership before hitting the stock markets. These include online payments processor SafeCharge and digital advertising company Crossrider public.
The focus of Kape Technologies seems to be on acquiring online businesses with a security and privacy focus. They bought CyberGhost VPN last year for £9.1 million and also own Windows repair software ReImage and driver update programme DriverAgent.
To date, none of these companies has been taken public, but with Sagi’s track record, few would be surprised if they did sooner or later.
Another possible motivation for buying both ZenMate and CyberGhost could be that Sagi sees the VPN market growing in the years ahead. There has been significant recent growth in VPN use all over the world and as online privacy comes under sustained attack all over the world, this trend seems certain to continue.
What the acquisition means for ZenMate users
The public announcement of Kape’s acquisition of ZenMate certainly suggested that the plan was to invest in improving the service. In the statement, Kape talked about ensuring faster delivery of new ZenMate products to the market, delivering better UX, and adding more functions to their VPN service.
They also stressed their commitment to ZenMate’s core principles in terms of protecting user anonymity, which will no doubt come as a relief to existing users.
One service that was conspicuous in its absence from the Kape Technologies' statement was the free ZenMate VPN service.
As this appears to make up the bulk of ZenMate’s user numbers it would seem strange to do away with this service, but it could be that Kape has a strategy to lure some of those free users onto subscription plans before slowly winding down the free service.
Any takeover of a VPN is a worrying time for its users. But ZenMate subscribers can look to the experience of CyberGhost and take a little comfort.
CyberGhost has continued to flourish and user numbers have risen under Kape Technologies' stewardship. Indeed, our review earlier this year was extremely positive, with their terrific apps and growing server network singled out for particular praise.
We would certainly advise ZenMate users to keep a close eye on developments and don’t be shy to shop around for a better VPN if you don’t like what’s happening. But based on Kape Technologies' track record, your VPN looks to be in safe hands.