Kape Technologies Acquire Private Internet Access

Kape Technologies has announced its acquisition of the highly respected VPN company Private Internet Access (PIA). Despite concerns over being based in the United States, PIA has a strong reputation within the privacy community, resulting in over two million paying customers.

PIA’s previous CEO, Ted Kim, will become a non-executive director at Kape and will continue to direct North American operations.

A more centralized VPN market

Private Internet Access now joins CyberGhost VPN and ZenMate as members of the Kape VPN stable.  It also joins a growing trend of VPN companies becoming snapped up by larger multinational conglomerates. 

IPVanish, StrongVPN, Encrypt.me,  and others, for example, are now all owned by J2 Global group, while Hotspot Shield, Betternet, and Touch VPN are owned by AchorFree. 

As the VPN marketspace become increasingly competitive, this trend is not very surprising. And in many ways it is positive. The huge resources these super-companies can throw at their services are driving down prices for consumers while at the same time allowing them to offer extremely well-engineered and fully-featured products.

The inevitable flip side of this, of course, is that smaller “indie” VPN companies are going to find it increasingly harder to compete. They are, indeed, ever more unlikely to be able to do so on like-for-like terms.

The acquisition of PIA appears to confirm this trend since part of the deal involves Kape paying off $32.1 million in debts owed by PIA’s parent company, London Trust Media. Clearly the company was struggling to compete. 

Can diversity survive?

We do, however, feel (and hope) that there is a space for both kinds of VPN in the market:

On the one hand, VPN services with rock-bottom prices, insane marketing budgets, and highly professional products that meet the needs of the average VPN consumer. And on the other, services which are more expensive and less polished, but which cater to a more privacy-focused market who prefer to place their trust in smaller, more independent companies. Only time will tell. 

Written by: Douglas Crawford

Has worked for almost six years as senior staff writer and resident tech and VPN industry expert at ProPrivacy.com. Widely quoted on issues relating cybersecurity and digital privacy in the UK national press (The Independent & Daily Mail Online) and international technology publications such as Ars Technica.

7 Comments

  1. Victor

    on December 7, 2019
    Reply

    This page from Kape (the new owner) contains investor presentations explaining the acquisition: https://investors.kape.com/reports-and-presentations/2019

  2. alan

    on November 30, 2019
    Reply

    Hello Douglas. I would expect you to write more about the new owner formerly known as Crossrider that has been linked to malware and other practices.

  3. Nigel

    on November 28, 2019
    Reply

    I'm strongly considering a switch over to Mullvad due to this news. If PIA would have been more up front about answering questions, I was ready to listen and have a real dialogue. I've trusted PIA for a long time and was hoping to continue, if only they would have sent their executives to answer our questions. When Startpage was acquired recently, they really put forth an effort to answer questions, explain specifics, and even their CEO wrote a public letter addressing concerns. In contrast, PIA has been totally aloof, minus sending some low-ranking staff onto Reddit to do damage control. They've been censoring comments on their blog asking for answers. Customers who e-mail them asking questions get a canned response. Founder Andrew Lee and CEO Ted Kim are nowhere to be found. This was a complete trainwreck from a PR perspective and I really expected better from PIA.

  4. Tatem

    on November 25, 2019
    Reply

    There's a very simple solution to the privacy concerns: third party auditing. Kape and PIA should post a public announcement on the PIA blog that they will have a third party audit conducted once a year to verify PIA's claims. This will eliminate most of the suspicion around Kape and prove that they're legitimate. Yes, it will be expensive, but not as expensive as losing a huge portion of your customers.

    1. Douglas Crawford replied to Tatem

      on December 9, 2019
      Reply

      Hi Tatem. Agreed. We are very big fans of third party auditing (when done right and the results are published in full by the auditing company).

Write Your Own Comment

Your comment has been sent to the queue. It will appear shortly.

Your comment has been sent to the queue. It will appear shortly.

Your comment has been sent to the queue. It will appear shortly.

  Your comment has been sent to the queue. It will appear shortly.

We recommend you check out one of these alternatives:

Large brand with very good value, and a budget price

The fastest VPN we test, unblocks everything, with amazing service all round

Longtime top ranked VPN, with great price and speeds

One of the cheapest VPNs out there, but still a good service