Zoom buys Keybase — its first acquisition — as part of 90-day plan to fix security flaws

Key Points
  • Zoom is acquiring Keybase, a 25-person start-up in New York, to add end-to-end encryption to video calls.
  • Zoom CEO Eric Yuan put in a place a 90-day plan, on April 1, to address the company's security problems.
  • He calls Keybase "the best tech and the best team" in video encryption.

In this article

Zoom CEO Eric Yuan speaks at the Dropbox Work In Progress Conference in San Francisco on September 25, 2019.
Matt Winkelmeyer | Getty Images for Dropbox

Zoom has acquired security start-up Keybase, the first purchase in the company's nine-year history.

With in-person dealmaking off the table because of social distancing requirements, the negotiations took place over Zoom video calls. Terms of the deal weren't disclosed.

The acquisition of the 25-person start-up is the latest move in a 90-day plan that Zoom announced on April 1 to fix its security flaws. Zoom CEO Eric Yuan told CNBC the company needed a solution for users who are demanding the highest level of privacy and certainty that uninvited participants have no access to their conversations. 

When Keybase is implemented, the Zoom user who schedules a meeting will be able to choose end-to-end encryption. That setting will prevent anyone from calling in by phone, which is one way people can access meetings, and will disable cloud-based recording of the chat. Yuan said it's critical that users know that the encryption key is not on Zoom's servers, so the company has no access to the contents of the call.

Yuan has made security his primary focus over the past month, after Zoom was hammered by critics for allowing "zoombombings" from unwelcome guests, allegedly misleading investors about its level of encryption, and revelations that its app shares personal data with Facebook. Zoom has acknowledged that it was unprepared for the sudden spike in usage, which has surged thirtyfold since the end of December as millions of office workers were forced to comply with lockdown orders. 

In early April, Yuan hired former Facebook security chief Alex Stamos as a consultant to help the company beef up its efforts after apologizing to users for falling "short of the community's — and our own — privacy and security expectations." Within days, Stamos was on the phone with Keybase co-founder Max Krohn, and the teams started working toward a deal. Yuan said after he talked with Krohn and dug into Keybase's software, he was convinced this was the right deal.


"If you look at all the technologies, all the companies, I think Max and Keybase have the best tech and best team," Yuan said, in a Zoom call on Wednesday, which Krohn also joined from his home in New York.

Krohn said it will take some time to bake Keybase's technology into Zoom's software, primarily because the product is currently used largely by security and cryptography experts and needs to be simplified for Zoom's broad customer base.

"These are subtle problems and we've been working on this problem for roughly five years, and nothing else," said Krohn. "Teaming up with Zoom really gives us an amazing opportunity to apply all our technology and all our expertise at a scale that's much larger."

The Keybase service will be part of Zoom's paid offering, not the free service. The announced deal comes after Zoom added more rudimentary security features, like defaulting to the waiting room option so the meeting host can control who joins, and forcing people who join manually to enter a password. In a blog post on Monday, Yuan said that in his effort to meet the company's 90-day plan for improvements, "We are working hard, engaging top experts to help us, and not wasting any time."

As for hashing out the acquisition, Yuan said it worked well over Zoom and that "I feel like this could be the standard," though he acknowledged that in this case they had "no choice."

Krohn said not having to fly across the country for a meeting allowed the deal to close about 25% faster. He was also able to avoid airports and planes and to stay at home, focused on the technical aspects of the tie-up, which is "where I prefer to work and what I prefer to think about," Krohn said.

Keybase raised a $10.8 million financing round in 2015, led by Andreessen Horowitz.

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