In a significant milestone, Cato Networks, the Tel Aviv-based startup that combines software-defined networking, managed cybersecurity, and global backbone services into a single offering, has announced a $238 million equity investment. This latest round values the company at over $3 billion.
LightSpeed Venture Partners Leads the Round
The investment was led by LightSpeed Venture Partners, with participation from Adams Street Partners, SoftBank Vision Fund 2, Sixty Degree Capital, and Singtel Innov8. This brings Cato’s total raised to $770 million.
Scaling the Organization in Key Areas
According to Shlomo Kramer, Cato’s founder and CEO, "Cato will use the new funds to scale its organization in three key areas: delivering Cato’s vision and customer success to a broader audience, expanding our partner ecosystem offering, and growing the engineering and product team in charge of our high-velocity train of innovative capabilities."
The Founding Story
Kramer, a serial entrepreneur with a background in computer science and mathematics, launched Cato in 2015. Prior to this, he co-founded Check Point, the IT security company, and Imperva, which provides monitoring and risk management solutions for businesses.
Addressing Industry Challenges
The cybersecurity and networking industry often face challenges related to the evolving threat landscape, the complexity of securing remote and hybrid work environments, and the need for scalable and agile solutions. Kramer emphasizes that simply adding another point solution to meet each problem is not a viable answer. Instead, what’s needed is a single platform that addresses all these challenges while reusing existing spend.
The Cato Product
Cato’s product boils down to a cloud-based mesh that lets businesses connect to network resources regardless of where they are. The company operates points of presence (POPs) around the world, which deliver Cato’s services to customers.
Key Features
- Software-Defined Networking: Cato’s solution enables secure and scalable remote work solutions by leveraging software-defined networking.
- Managed Cybersecurity: Cato provides comprehensive cybersecurity services, including threat detection, incident response, and security information and event management (SIEM).
- Global Backbone Services: Cato offers a global backbone of network points of presence that provide secure connectivity to customers.
Growth Plans
The company plans to grow its headcount from 800 employees to over 900 by the end of the year. Additionally, Cato aims to expand its partner ecosystem and deliver its services to a broader audience.
Impact of the Pandemic
The pandemic accelerated the need for secure and scalable remote work solutions, which played to Cato’s strengths. Kramer notes that the company has adapted to the changing landscape and experienced growth as a result.
Sustainability
Cato is committed to maintaining a sustainable financial model that supports its growth objectives. Kramer emphasizes that the company is well-positioned to weather potential headwinds effectively, including any broader tech industry slowdown.
Conclusion
In conclusion, Cato Networks’ latest funding round represents a significant milestone for the company. With over $3 billion in valuation, Cato is poised to continue delivering innovative solutions to the cybersecurity and networking industries.