CATO Networks' oversubscribed Series G suggests SASE category has real room for growth

CATO Networks has raised $359 million at a $4.8 billion valuation as the Secure Access Service Edge (SASE) segment it plays in continues to grow. 

SASE does for networking and security what the cloud did for compute and storage; let someone else handle the heavy lifting, with dedicated, managed networks and a host of associated zero trust capabilities. 

CATO Networks said it would use the funding for innovation and to build out its DEM, LAN Security, IoT/OT Security, SD-WAN, SSE, XDR, and ZTNA offerings (“all natively converged in a single, cloud-native platform.”)

(For those unfamiliar with the acronym soup of this area, we interviewed CATO Network’s Chief Strategy Officer last year below; hopefully it helps.)

See also: The Big Interview: Cato Networks CSO Yishay Yovel

New investors Vitruvian Partners and ION Crossover Partners led the round, with participation from existing investors Lightspeed Venture Partners, Acrew Capital, and Adams Street Partners, CATO Networks said.

Much like Content Distribution Networks (CDNs) and even content providers like Netflix have built up their own “points of presence” or POPs, so has Cato Networks – which has built up around 90 POPs globally (think bare metal compute nodes running in Tier 1 data centres).

These are interconnected by what CSO Yishay Yovel described to us last year as a “Five 9s carrier-grade network” of multiple tier-1 network providers, “backed by SLAs on availability, latency, packet loss, and jitter.” 

CATO Network customers get shipped a small physical appliance called a “socket” that automatically identifies the nearest POP. If a tunnel disconnects, the Cato Socket reestablishes the tunnel to the nearest available PoP. (It provides a version for branch offices and another for data centres. Both are secured by Cato’s network operations centre.)

See also: Taming the SASE monster: questions for CIOs

Or as Yovel put it: “The device has one mission, which is to move the traffic from the locationto the nearest POP, done dynamically. Everything else is done in the cloud: Security is done in the cloud; global routing is done in the cloud. So we [have] a cloud-first, lightweight edge strategy..."

Cato reported 46% year-over-year ARR growth in 2024 and now serves more than 3,500 enterprise customers. One big blue chip win was brewer Carlsberg in a “SASE” deployment spanning 200+ locations and 25,000 remote users. Its growth has come as traditional network appliances (SSL/VPN boxes et al) come under sustained exploitation. CATO competes with the likes of Zscaler and Palo Alto Networks in the SASE segment. 

“As a longtime investor in Cato Networks, we’ve had a front-row seat to its incredible journey, from defining the SASE category to leading it,” said Ravi Mhatre, partner and co-founder at Lightspeed Venture Partners. 

“Cato is reshaping enterprise security… They’re not just eliminating IT complexity. They’re unlocking real agility for the digital business.”  

The company said the fresh funding will also let it “grow Cato’s partner ecosystem and customer-facing teams to meet surging global demand.”