SASE Specialist Cato Networks, Valued At $1B, Secures Record Funding Round

Cloud networking specialist Cato Networks just closed its largest funding round to date -- $131 million -- dwarfing its April funding round of $77 million.

The new funding affirms Cato’s leadership in secure access service edge, or SASE, a cloud-based platform approach to IT that combines SD-WAN capabilities with security that is growing in popularity with both business customers and SD-WAN vendors. The Tel Aviv, Israel-based company will use the funds to accelerate its technology expansion in the SASE space, said Shlomo Kramer, Cato’s founder and CEO.

The latest funding round was led by Lightspeed Venture Partners with participation of a new investor, global investment manager Coatue, as well as existing investors, Greylock, Aspect Ventures/ Acrew Capital, Singtel Innov8, and Cato‘s own leader, Kramer.

Prior to the latest funding round, Cato was valued at $1 billion, according to the company. The new round of funding brings the company’s total financing to $332 million.

“We’ve seen many network security companies assembling [SASE] solutions, but we are the first and only pure SASE platform that was built from the ground up,” Kramer said.

[Related: Cato Networks Nabs Former Cisco Viptela Exec As Channel Chief]

Cato over the last five years has added more than 650 enterprise customers with more than 7,000 locations across 100 countries, as well as 200,000 employees working from home and on the road -- an important aspect right now as the COVID-19 pandemic continues to forces employees all over the globe to work remotely, said Yishay Yovel, Cato’s chief marketing officer.

The opportunity around SASE is huge because it’s not just another point solution -- it’s a platform that’s going to change the way enterprise IT is done, Yovel said.

“This is changing everything that has to do with networking and security,” he said.

Cato Networks has more than 60 points of presence located globally, the company said, which gives users access to all the same networking and security resources, regardless of their location.

The company said it will be putting the latest investment toward marketing and engineering headcount. Kramer said that the company expects to go from about 285 employees to 400 over the course of the next year. “It’s all about getting in front of more customers and partners,” he added.

Cato’s channel partners, especially MSPs, can easily plug into the SASE platform via APIs to provide added value services to their customers, Kramer said.

“The key here is that customers have the flexibility to either self-service, co-manage with the partner, or go fully-managed, and the Cato platform provides all of this flexibility,” he said.

Cato Networks, which does 100 percent of its business through partners, brought on former Viptela and Cisco executive Anthony D’Angelo was as its first channel chief in July. In April, the company secured $77 million in funding, bringing its total funding to more than $200 million at the time.