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Friday, September 22, 2023

Shlomo Kramer’s cybersecurity unicorn snags $238m at over $3 billion valuation

Cato Networks, a maker of cloud-based, secured networks for large enterprises that lets remote workers connect to applications regardless of where they are, has raised $238 million in funding at a company valuation of more than $3 billion.

The financing was led by existing investor LightSpeed Venture Partners, with participation of global asset manager Adams Street Partners; Softbank Vision Fund 2, the Japanese giant’s investment tech arm; Canadian investment company Sixty Degree Capital; along with Singtel Innov8, the venture capital arm of Asia’s Singtel Group. Following the round, Ravi Mhatre, founder and managing director of LightSpeed Venture Partners, will join Cato’s board of directors.

The funding marks the cybersecurity firm’s largest round, after it raised $200 million at a $2.5 billion valuation in 2021. The fresh capital takes the firm’s total funds raised to date to $773 million.

Cato was co-founded in 2015 by Shlomo Kramer, a cybersecurity entrepreneur who previously co-founded Check Point Software Technologies and Imperva, Inc. French aerospace and defense electronics group Thales earlier this year inked an agreement to buy Imperva Inc. in a deal worth $3.6 billion.

Kramer created Cato with former Imperva colleague Gur Shatz to develop cloud-based, secured networks for large enterprises that can be accessed from any location, including via mobile devices. The secure access service edge, or SASE platform, provides a single cloud-based network that connects and secures any physical location, cloud resource, or mobile device to any application accessed by users regardless of where they are signing in from.

“This funding round reflects investor confidence in Cato’s leadership in the single-vendor SASE market,” said Kramer, who serves as Cato’s CEO. “Cato’s SASE platform uniquely enables organizations of all sizes to optimally secure their businesses without the cost, complexity, and risk of owning and maintaining a pile of point solutions.”

Shlomo Kramer, co-founder and CEO of Israeli cybersecurity firm Cato Netowrks. (Courtesy)

“Cato provides the only SASE platform creating a seamless customer experience and empowers IT to move at the speed of business,” he added.

By 2025 more than 60 percent of enterprises are expected to consolidate or adopt SASE components up from 15% in 2021, according to a Gartner research report.

The Tel Aviv-based cybersecurity firm said the freshly raised funds will be used to drive business in three key areas: “delivering Cato’s vision and customer success to a broader audience, expanding the partner ecosystem offering managed Cato SASE services, and growing the engineering and product team in charge of our high-velocity train of innovative capabilities.”

Cato currently has more than 800 employees. Its SASE platform is used by more than 1,800 enterprises, including Carlsberg and the TAG Heuer Porsche Formula E. In 2022, the company generated more than $100 million in annual recurring revenue (ARR), growing revenues at over 60% year-over-year.

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