Cybersecurity company Cato Networks has raised $359 million in a Series G funding round. This new funding brings the company’s value to $4.8 billion, a big jump from its previous $3 billion valuation in September 2023.
New investors like Vitruvian Partners and ION Crossover Partners led the round. Existing investors, including Lightspeed Venture Partners, Acrew Capital, and Adams Street Partners, also took part in the funding.
With this new round, Cato Networks has now raised over $1 billion in total. It also shows a strong comeback for Israel’s cybersecurity sector, coming just two weeks after Cyera raised $540 million at a $6 billion valuation.
About one-third of Cato’s new funding — around $120 million — came from a secondary sale, where employees sold some of their shares. This means only 70% of the money raised will go directly to the company.
This move was mainly to let long-time employees get some money from their shares since Cato’s expected IPO, which was once planned for 2025, has been delayed again.
At the end of 2024, it looked like Cato was preparing to go public. The company added Mellanox founder Eyal Waldman to its board, along with Gili Iohan, former CFO of the public cybersecurity firm Veronis and now a partner at ION, one of Cato’s investors.
Earlier this year, Cato said it had reached an annual revenue run rate of $250 million, which is a 46% increase from the previous year. However, the company is still not profitable, which could make it harder to get a high valuation in an IPO.
“We didn’t need the money from this round, we could continue growing and reach positive cash flow without it,” says Shlomo Kramer, Cato’s co-founder and CEO, “But there was an opportunity here for a round at an attractive valuation that also lets our employees enjoy the fruits of their labor.
“In today’s geopolitical reality, with 3,500 large enterprise customers, it’s important for us to present a strong balance sheet and long-term stability,” Kramer adds. “This funding doesn’t change our IPO plans on Wall Street. If we want, we can press a button and become a public company in a few months.”
Kramer is a serial entrepreneur best known for co-founding Check Point with Gil Shwed and Marius Nacht over 30 years ago. After retiring from Check Point, he started the cybersecurity company Imperva, which he sold to the private equity firm Thoma Bravo for $2 billion in 2018.
He co-founded Cato with Gur Shatz in 2015 to build a new generation of remote network access using a SASE (Secure Access Service Edge) platform built entirely in the cloud. Cato was founded on the understanding that traditional security and networking infrastructure had grown expensive, slow to adapt, and dangerously fragmented.
Today, IT and network security teams have to deal with more complex challenges, smaller teams, and constant pressure to protect their organizations. Cato helps by providing strong security and connection through one easy-to-use, cloud-based platform. It replaces old, complicated systems made up of firewalls, routers, proxies, and other separate tools.
The new funding will help Kaito grow in the SASE and AI-powered security market. It will improve its platform and reach more customers who were not part of its target market before.
According to Gartner, the SASE market is expected to grow by about 26% every year and reach $28.5 billion by 2028. However, the market is very competitive, with big companies like Palo Alto Networks, Fortinet, and Cisco fighting to be the leaders.
Read more- Blostem Raises Seed Funding Led by AC Ventures to Expand Digital FD Platform
