Israeli cloud network startup nets $130m in Lightspeed-led round

Cato Networks, a cloud-based technology company, has secured US$130 million in its series E round of funding, its largest to date.

Photo credit: Cato Networks

Lightspeed Venture Partners led the fundraise, with participation of a new investor, Coatue Management. Existing backers include Greylock, Aspect Ventures/Acrew Capital, Singtel Innov8, and Shlomo Kramer, Cato’s CEO and co-founder.

The Israel-based firm offers secure access service edge (SASE), a platform that centralizes the management of security across a company’s various networks and remote access points.

The latest round brings Cato’s total financing to US$332 million. The company says that prior to this round, it was valued at US$1 billion. It had raised US$77 million in April, after bookings for 2020 tripled in comparison with the previous year.

Today, Cato has a cloud-based network of 60 points of presence (PoPs) around the world, reducing the operational costs of firms amid a pandemic that has hampered several companies’ bottomline.

The emerging SASE market is expected to more than double in the next five years, according to a report by market research firm Dell’Oro Group.

“SASE will transform the multibillion dollar markets for enterprise networking and security,” said Lightspeed partner Yoni Cheifetz. He added that the platform enables users to dynamically support secure and optimized work from anywhere.

Other key players in the SASE landscape include Zscaler, Cisco, Akamai, McAfee, Netskope, and Palo Alto Networks, among others. Although no single vendor offers the entire SASE portfolio, several  have a majority of the functionality.

A report by research firm Gartner also states that by 20204, at least 40% of enterprises will have clear strategies for SASE adoption.