Cato Networks raises $359m at $4.8b valuation

The Israeli cybersecurity company has seen its valuation jump from $3 billion in less than two years.

Israel's cybersecurity industry continues to raise vast sums from foreign investors. Cato Networks has announced the completion of a $359 million Series G financing round at a company valuation of $4.8 billion.

In less than two years since its previous financing round, the company's valuation has jumped from $3 billion to nearly $5 billion and become one of Israel's most valuable cybersecurity companies. Earlier this month Israeli data security company Cyera raised $540 million at a company valuation of $6 billion and in March enterprise browser security company Island raised $250 million at a valuation of nearly $5 billion.

Cato Networks annual recurring revenue (ARR) increased from $100 million at the end of 2022, on the eve of the previous round, to $250 million at the end of 2024. This figure represents a multiple of 19-20 on revenue, a low figure compared with earlier stage companies, but more realistic and more appropriate for a mature growth company like Cato, which raised its first capital almost a decade ago.

If Cato wants to hold an IPO, this represents a reasonable multiple, which is appropriate for Wall Street. Palo Alto Networks' revenue multiple is about 15, while Fortinet's is about 12. According to Cato, it is growing at twice the rate of the rest of the market in which it operates, the cloud-based network security (Secure Access Service Edge -SASE) market, and it claims that it is increasing its market share at the expense of players like Palo Alto Networks, Cisco, and Fortinet.

The round was led by new investors including Vitruvian Partners and ION Crossover Partners as well as existing investors including Lightspeed Venture Partners, Acrew Capital, and Adams Street Partners. The latest financing brings the total amount raised by the company to more than $1 billion. In the past Cato's investors have included Greylock, Coatue, Singtel and SoftBank.

The company's high growth rate brings it closer to an IPO. Cato's founder and CEO Shlomo Kramer told "Globes" even before the outbreak of the war in October 2023 that the company would go public in late 2024 or early 2025. But it seems that Cato is still waiting for an opportunity to go public, especially since it is not yet known when it will move to profit..

Cato says, "The company maintains a high level of preparedness to become a public company, and we will be ready to do so at the push of a button, when the timing is right and market conditions are optimal. The current funding strengthens the company's financial position and gives us the flexibility needed to accelerate strategic initiatives, as well as to continue to challenge the boundaries of the SASE and AI-based security industry, deepen the variety of uses supported by the platform, and expand the potential market (TAM) to additional customers."

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Cato was founded by Kramer and his former colleague at Imperva Gur Shatz who is no longer with the company, as a "third generation of enterprise firewall," - a cybersecurity company that uses the latest cloud technologies to protect the corporate communications network from the outside world. It became a unicorn in 2020, when it raised $130 million, but it took a little longer to gain recognition. Cato has 1,400 employees including about 700 in Tel Aviv's Landmark Tower.

Only in 2023 did it manage to convince the research firm Gartner to establish a special industry category for the field and call it "SASE" - SASE (or: Secure Access Service Edge). In the ranking of companies in the field published last year by Gartner, Cato was placed in second place, between Palo Alto Networks and Netscape.

This category contains companies that have developed a new way to protect access to devices in an organization - such as a phone, computer, car or even a refrigerator - all connected to the cloud - through a service provided to the IT manager, also via the cloud.

Published by Globes, Israel business news - en.globes.co.il - on June 30, 2025.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.