Looking to take on Silicon Valley powerhouses like Cisco and Palo Alto, Cato Networks on Tuesday announced a new funding round of $200 million aimed at expanding its presence in the secure access service edge (SASE) market.
The new funding represents Cato’s largest round to date, bringing the company’s total funding to $532 million and a market valuation of $2.5 billion. In a release, Cato said the funding would help accelerate the company’s sales, technology, and business growth with an eye toward servicing the security needs of large enterprises.
Industry analysts have been waiting for SASE to emerge over the past few years with its promise to cross the boundaries of networking, the cloud, security, and remote access. Cato Networks aims to solve these integration issues to become a leader in the SASE market.
Cato Networks has been beating the SASE drum from the start and certainly has a compelling story, said John Grady, senior analyst for network security at the Enterprise Strategy Group. Grady said Cato has an advantage in that its platform was purpose-built for SASE and is fully cloud-native, while some of Cato’s competitors have been forced to rearchitect and integrate different tools to build out a SASE product.
On the other hand, Grady said Cato has been more focused on the network side of SASE and has been working towards adding additional security capabilities. Grady said many customers are taking a security-first approach to SASE — so this has emerged as a gap — one that Cato plans to fill.
“They’ve also seen a lot of their traction in the mid-market to date, rather than the large enterprise,” Grady said. “So they’re certainly a visionary, but this space is too fragmented and nascent to declare a leader. There are some very large, successful competitors such as Palo Alto Networks, Cisco, Fortinet, and VMWare just to name a few that are ‘all-in’ on SASE as well.”
Frank Dickson, program vice president for security and trust at IDC, added that companies like Cato recognized that the shift to hybrid work that happened even before the pandemic in which the internet serves as the primary connection will fundamentally change the way edge security products will get provisioned.
“A modern approach to secure access that emphasizes least privileged access, continuous monitoring, and cloud scalability and flexibility while providing low-friction looks to secure remote workers without the latency created backhauling traffic back to a centralized security inspection point,” Dickson said.