Cato Networks, an Israeli cybersecurity company, has raised $359 million in a Series G funding round. This brings the company’s valuation to $4.8 billion, a significant increase from its $3 billion valuation in September 2023. The funding round was led by new investors Vitruvian Partners and ION Crossover Partners.
Existing backers such as Lightspeed Venture Partners, Acrew Capital, and Adams Street Partners also participated. The latest round brings Cato Networks’ total funding to over $1 billion. Approximately $120 million of the new funds will go to employees through a secondary sale.
The remaining 70% will be infused directly into the company. This move aims to allow long-serving staff to benefit financially as the company continues to delay its anticipated IPO. Cato Networks has achieved an annual revenue run rate of $250 million, a 46% year-over-year increase.
However, the company has yet to reach profitability, which could complicate premium IPO valuation aspirations. “We didn’t need the money from this round, we could continue growing and reach positive cash flow without it,” said Shlomo Kramer, Cato’s co-founder and CEO.
Cato Networks’ funding milestone
“But there was an opportunity for a round at an attractive valuation that also lets our employees enjoy the fruits of their labor.”
Kramer emphasized that the new funding solidifies the company’s balance sheet and long-term stability. This is particularly important given today’s geopolitical climate and their base of 3,500 large enterprise customers. Despite the influx of capital, Kramer reaffirmed that the company’s IPO plans remain flexible, suggesting they could become public within months if they chose to.
Shlomo Kramer is well-known for founding Check Point alongside Gil Shwed and Marius Nacht over 30 years ago. After his time at Check Point, he started Imperva, which he sold for $2 billion in 2018. In 2015, he co-founded Cato Networks with Gur Shatz to revolutionize remote network access using a SASE (Secure Access Service Edge) platform built entirely in the cloud.
Cato Networks was founded to address the challenges of traditional security and networking infrastructure, which had become expensive, slow to adapt, and fragmented. The company aims to simplify network and IT security by delivering enterprise-grade security and connectivity through a unified, cloud-native platform. With the new funds, Cato Networks plans to enhance its SASE and AI-powered security solutions, expand its platform capabilities, and reach a broader range of potential customers.
According to Gartner, the SASE market is projected to grow at an average annual rate of 26% and hit $28.5 billion by 2028, with competition from industry giants like Palo Alto Networks, Fortinet, and Cisco. The fresh capital positions Cato Networks to continue pushing the boundaries of the cybersecurity industry and solidify its position in the growing SASE market.
A seasoned technology executive with a proven record of developing and executing innovative strategies to scale high-growth SaaS platforms and enterprise solutions. As a hands-on CTO and systems architect, he combines technical excellence with visionary leadership to drive organizational success.
