Cato Scores $130 Million, Claims Unicorn Status

Oftheunicorn

By: R. Scott Raynovich

Cato Networks has scored a fresh round of $130 million in funding to boost its goal of leading the growing market for secure edge and secure access service edge (SASE) solutions.

The vendor says this round gave it a pre-investment valuation of over $1 billion, bringing it to the status of tech "unicorn." The round was led by Lightspeed Venture Partners with participation from new hedge-fund investor Coatue, along with existing investors Greylock, Aspect Ventures, Acrew Capital, Singtel Innov8, and Cato Co-Founder Shlomo Kramer. Cato has raised $332 million since its founding in 2015.

The new money comes less than a year after Cato scored $77 million to boost its business, which the vendor claims has grown by 100% in bookings this year. The company intends to use its new funds to expand on all fronts, including growing its employee roster about 43% from 270 employees to 385 and expanding its network, currently at 60 points of presence (PoPs) worldwide.

Targeting Growing SASE Market

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Cato views all this as progress toward further growth in enterprise edge security and building at the SASE. This strategy represents a evolution from Cato’s original pitch as one of the early providers of software-defined wide-area networking (SD-WAN) managed services.

But it comes as no surprise. SD-WAN has grown and evolved, and the category now includes more security functions -- making it part of the SASE categories for those vendors that also offer intergrated security solutions. Networking and security for edge deployment are converging.

Cato was one of the early vendors to jump on the SASE bandwagon, after Gartner Inc. coined the term and fired up the category. SASE is now being used in the broader technology marketplace by a number of security and networking technology vendors to describe enterprise edge solutions such as SD-WAN with cloud-based security functionality. Cato has always had a significant cloud security focus, building out its own IP Transit network and PoPs, along with AI-driven security functions.

Securing the Edge from the Cloud

SASE and Secure Edge are an outgrowth of the SD-WAN market, which has now reached billions of dollars, according to our SD-WAN research. With its significant funding round, Cato sees an opportunity to seize two of the hottest markets in networking -- enterprise edge and cloud security.

Cato won't be alone, of course. Expect more SD-WAN and networking players to turn up their presence in this market, including firewall and networking players such as Cisco (CSCO), Fortinet (FTNT), Juniper (JNPR), and Palo Alto Networks (PANW); as well as other vendors that have growing SD-WAN products, such as Aryaka Networks, CloudGenix (now part of Palo Alto Networks), Silver Peak (now part of HPE), Nuage Networks (now Nokia), VeloCloud (now VMware), and Versa Networks, to name just a few.