By Douglas MacMillan and Danny Yadron
To stay anonymous in the Facebook age, Nico Sell carries black
business cards with no phone number or email address, refuses to
say her age and wears sunglasses in photos to thwart
facial-recognition technology.
Now, Ms. Sell is testing whether there is a business in that
much secrecy.
This week investors pumped $30 million into Ms. Sell's startup,
Wickr, a mobile-communication app that uses high-tech encryption to
shield messages from prying eyes. The messages also
self-destruct.
The investment, led by James Breyer, a Silicon Valley venture
capitalist and early Facebook backer, is among the largest in
consumer-privacy technology since Edward Snowden started leaking
classified secrets last year. Wickr's new investors also include
CME Group Inc. and Cyprus-based videogame maker Wargaming, maker of
the "World of Tanks" series.
The cash infusion also puts pressure on Ms. Sell to speed her
transition from hacker hero to profitable entrepreneur. Ms. Sell is
best known as an organizer of Def Con, a hacker conference in Las
Vegas where speakers sometimes wear masks and detail exploits like
hacking into a pacemaker.
Ms. Sell founded Wickr in 2012 with the goal of offering
government-grade encryption to the masses. The free app for iPhones
and Android phones is now used to send about one million messages a
day, from discrete business communication to parents who want to
privately relay notes to their children, she says.
Wickr's potential as a business hinges on how well it lives up
to Ms. Sell's bold claims about its security, based on a
proprietary type of encryption. Users get a special key for each
message session that is used to decode jumbles of letters and
numbers. If a spy agency intercepted this traffic, it'd be
unreadable, Ms. Sell says.
For the Internet's leave-no-trace crowd, that is an enticing
pitch.
But cybersecurity experts and mathematicians said it is
difficult to create encryption that is both unbreakable and easy to
use.
To date, there has been no public audit of Wickr's encryption
setup. "Having a third-party assessment would go a long way in
meeting that expectation," said Erik Cabetas, founder of Include
Security, which tests apps and consumer technology for security
holes.
Ms. Sell says she is hesitant to publish too much about her
app's inner workings because she considers them a trade secret.
That means users have to trust her, essentially.
Wickr's app is free, but in coming months it will begin charging
users for extras, like video calling and graphical stickers (one
depicts a black helicopter), Ms. Sell says.
She also plans to license Wickr's encryption technology for use
in other programs and apps. One app for a financial-services
company will store messages for seven years -- the period required
by the U.S. Securities and Exchange Commission -- and then delete
them. Wickr will make additional revenue by charging outside
developers for its security tools.
The licensing effort could help Wickr compete in the crowded
field of mobile messaging apps. Hundreds of millions of people
already use popular apps like WhatsApp, purchased by Facebook in
February for up to $19 billion, and Japanese chat program Line.
Instead of competing directly with these services, Wickr could help
improve their underlying security, said Mr. Breyer.
"I believe that what Nico is doing is extremely complementary to
Facebook and how Facebook is developing its messaging strategy,"
Mr. Breyer said. "There is room for what Wickr is doing to greatly
enhance the effectiveness and the utility of messaging."
Write to Douglas MacMillan at douglas.macmillan@wsj.com and
Danny Yadron at danny.yadron@wsj.com
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