The global pandemic has accelerated the digital transformation of a wide range of sectors. While consumers and businesses continue to embrace new online tools to manage this upheaval, the shift has created a need for greater security as people increasingly work from home.
In a rush to scale and meet that demand, Cato Networks announced that it has raised a $130 million round at a valuation of over $1 billion. The latest funding comes just seven months after the company raised a $77 million round and brings its total funding to $332 million. Lightspeed Venture Partners led the round, with investment from Coatue, Greylock, Aspect Ventures/Acrew Capital, and Singtel Innov8.
Founded in 2015, Cato has developed a cloud platform, dubbed secure access service edge or SASE, that centralizes the management of security across a company’s various networks and remote access points. The ability to let companies rapidly change and scale their security systems to meet the challenges of the pandemic has boosted Cato’s appeal.
“This is the future of networking and network security,” Cato CEO and cofounder Shlomo Kramer said during a call with journalists. “We’ve seen many networking and network security companies adopting that and rushing to assemble a solution. But we are still the first and only pure SASE platform that was built from the ground up to address this problem. There is huge potential in front of us. I think that the valuation and size of the round speak to that.”
Cato’s cloud platform aims to make operations more secure, easier to monitor, and faster to scale when necessary. The SASE category refers to products that address the security of a company’s network, as well as its endpoints, through a single, unified system.
If a company wanted to physically reshape how and where employees were located, they would traditionally need to go through the cumbersome process of physically deploying security hardware appliances and software.
Cato’s platform sits between the various cloud services a company might use, its physical branch offices and datacenters, and wherever an employee happens to be working. By routing all traffic through that centralized hub, the company can rapidly optimize security as the type and number of access points change and the company adds additional applications.
“When things are in the cloud and not in appliances, you get cloud scale in terms of remote access,” Cato chief marketing officer Yishay Yovel said during the press call. “If you have 100 salespeople or 5,000 people in the organization, and you want everyone to work at home, the solution that works for 100 people will not work for 5,000 if it’s crammed into a box. So cloud scale is very important. You can serve any number of users if your platform is built for cloud scalability.”
Cato has enjoyed steady growth for several years. In its first five years, it has signed up 650 enterprise customers with over 7,000 locations across 100 countries. And in 2019, Cato raised $55 million. The company is based in Tel Aviv, where it is part of Israel’s booming cybersecurity ecosystem.
Cato has gradually built out its infrastructure to facilitate access to its service from a wider range of geographies. With that foundation in place, the company was ready when the pandemic spread and companies scrambled to let employees work from home.
“When COVID hit, demand basically skyrocketed,” Yovel said. “Essentially, all of our customers, instead of buying selectively remote access licenses for the individuals that needed them, had to give remote access to everybody, instantly. You need a cloud service and you need global capabilities to absorb this increase so fast.”
Cato will use the latest funds to continue hiring and building out its infrastructure and expand its marketing.
