NSO Group's Founder Launches Dream Security Amid Controversy

NSO Group, co-founded by Shalev Hulio, has faced significant scrutiny since its Pegasus spyware was linked to surveillance on journalists, human rights activists, and dissidents in approximately 50 countries. The company's reputation suffered further when Meta Platforms Inc. sued NSO in 2019 for allegedly reverse-engineering WhatsApp to distribute malware. Following a series of legal challenges, including a punitive damages ruling that was later reduced, the U.S. government blacklisted NSO, prompting a decline in Israel's hacking-for-hire industry. Some companies relocated to countries like Cyprus and Greece, while others, including NSO, struggled to retain clients.

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In the wake of NSO's controversies, Hulio founded Dream Security alongside former Austrian Chancellor Sebastian Kurz and Israeli intelligence veteran Gil Dolev. Dream Security focuses on protecting critical infrastructure from cyberattacks, steering clear of spyware. The startup has raised over $100 million and is valued at more than $1 billion, generating $120 million in revenue last year from clients in the Persian Gulf, Southeast Asia, and Europe. Hulio projects sales could reach $200 million this year, leveraging his experience in the cybersecurity sector.

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Despite his past with NSO, Hulio maintains strong relationships with Israeli tech investors and government officials. Dream Security's headquarters in Tel Aviv reflects a patriotic theme, and the company has attracted significant investment from U.S. and Israeli firms, including Bain Capital. Investors cite Hulio's charisma and experience in securing government contracts as key factors in their support. However, skepticism remains regarding the potential stigma associated with Hulio's previous work.

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Dream Security aims to develop groundbreaking technology, including large language models to identify and neutralize cyber threats. The company plans to expand its services to military and nuclear facilities and enter the U.S. market by 2026. However, regulatory hurdles and concerns about Hulio's history with offensive hacking tools may complicate its entry into the U.S. market. Jennifer Ewbank, a former CIA official, noted that defensive capabilities could raise suspicions due to their potential dual-use nature.

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Hulio has expressed pride in his work at NSO, acknowledging past mistakes but emphasizing that the company operated under Israeli government approval. He stated, “I never thought I needed to reinvent myself. I’m very proud of NSO. I don’t think there are many companies that saved so many lives.” Meanwhile, investors like Dovi Frances have indicated confidence in securing meetings with U.S. officials, suggesting a favorable environment for Dream Security.

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Critics argue that Hulio's previous work with NSO facilitated the abuse of surveillance technology by authoritarian regimes. Some in the cybersecurity community believe he is a scapegoat for broader Israeli policies that promote business with nondemocratic countries. Despite the controversies, some supporters contend that Hulio's experience and connections could help Dream Security navigate the complex landscape of cybersecurity.

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While Dream Security has ambitious plans, it remains to be seen whether it can achieve the same level of innovation as NSO. The company has yet to demonstrate its capabilities in a market that is increasingly wary of its founder's past. As Dream Security prepares for its next steps, the lingering concerns about its origins and the implications of its technology will likely shape its future trajectory.

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