Cato Networks Takes Aim At Cisco, Palo Alto Networks For SASE Dominance With $200M Funding Round

Standalone cloud networking company Cato Networks is going into battle for SASE dominance against the leading networking and security vendors armed with its largest funding round to date of $200 million.

Cloud networking specialist Cato Networks said it’s going on the offense to become the largest standalone SASE provider and leader in the market, announcing a new funding round that smashes its previous record total.

Cato Networks has raised $200 million in funding that brings the company’s total financing to $532 million. The new funding will go towards expanding engineering, sales, and marketing of the Cato SASE Cloud to capture more enterprise deals, according to the company.

Tel Aviv, Israel-based company has been on fire with funding in the past two years as the SASE market gains serious momentum. Cato Networks, which does 100 percent of its business through partners, in April 2020 brought in $77 million in Series D funding after a very strong 2020 first fiscal quarter. Cato in November then dwarfed that number with its largest funding round to date until now -- a Series E in the amount of $131 million.

Cato Networks is currently valued at $2.5 billion, according to the company.

[Related: Cato Networks Expands Global Partner Program With Eye On MSPs]

The company in 2019 secured a $55 million Series C investment round after growing its bookings by 352 percent in 2018. That growth, according to the company, was led by its channel partners.

The latest funding round revealed Tuesday was led by Lightspeed Venture Partners with the participation of existing investors Greylock, Aspect Ventures / Acrew Capital, Coatue, Singtel Innov8, and Shlomo Kramer, Cato‘s own founder and CEO.

The SASE market will grow at a compound annual growth rate of 116 percent, hitting a market value of $5.1 billion by 2024, according to research firm Dell’Oro Group. Cato is bracing itself to compete against the likes of networking and security leaders, such as Cisco, Fortinet, HPE, and Palo Alto Networks which are also aggressively going after market share in the same space with their own SASE strategies.

As a channel-first company, the latest funding round will naturally benefit the company’s growing channel ecosystem of more than 2,500 VAR, MSP, and agent partners, Anthony D’Angelo, vice president of channel and business development, said in an email to CRN.

“We are investing heavily in developing our channel ecosystem of master agents, VARs, and MSPs to accelerate our market penetration. Cato is supporting the channel with training, thought leadership, joint event sponsorships, and sales incentive programs to position the channel to win in the hot SASE market,” D’Angelo said.

Cato Networks was founded in 2015 and has about 400 employees today. The company plans to grow to 600 employees by the end of 2022, according to the company.