Paragon was established in 2019 by veterans from the Israel Defense Forces’ Unit 8200, with former Israeli Prime Minister Ehud Barak as an investor, who is estimated to hold a significant stake in the company. Battery Ventures, a prominent venture capital firm based in Boston, has also invested in the company. Two of Paragon’s founders had previously worked with Blumberg Capital, another notable venture capital firm from the United States.
In June, Israeli media reported that a U.S. private equity fund, which has a portfolio of security companies, has been in discussions to acquire a majority interest in Paragon, valuing the company at $1 billion.
To establish a unique “ethical” positioning approved by the U.S., Paragon has made concerted efforts to enter the U.S. market since its inception, as noted by the Atlantic Council. In 2019, during the development of its product Graphite, Paragon enlisted the consultancy services of WestExec Advisors, a Washington, DC firm co-founded by former Obama administration officials, including current U.S. Secretary of State Antony Blinken. WestExec Advisors was brought in to advise Paragon on its strategic approach to the U.S. and European markets.
To maintain a favorable relationship with the U.S. government, Paragon hired Holland & Knight, a lobbying firm based in Washington, DC, in February 2023. The firm’s strong track record in avoiding sanctions was a key factor in this decision. Disclosure documents show that Paragon spent at least $280,000 on lobbying efforts in 2023 and 2024.
Paragon’s lobbying efforts seem to have been effective, as the company has not been blacklisted nor have any of its executives been sanctioned by the Biden administration. Additionally, an executive order from President Biden allows enough leeway for the lawful deployment of tools like Graphite. According to a senior U.S. administration official, the executive order mandates agency heads to review any relevant activities but does not preclude lawful usage.
Paragon continues to expand, advertising several roles in Israel. It has also increased its U.S. presence by hiring intelligence veterans, including former CIA and FBI officers, at its subsidiary, following the signing of the executive order in hopes of securing new business opportunities. This growth was confirmed by recent reports from February 2024.
A $2 million contract with ICE underscores Paragon’s successful strategy. However, it remains to be seen whether the deployment of Graphite will adhere to the principles of protecting human rights, privacy, and democracy.
