Cloud networking company Cato Networks Ltd. has announced another bumper funding round, this time closing on a late-stage $200 million round that brings its total amount raised to $532 million.

Lightspeed Venture Partners led today’s round, with participation from existing investors Greylock, Acrew Capital, Coatue, Singtel Innov8 and Shlomo Kramer. The round values Cato Networks at $2.5 billion.

The Tel Aviv-based startup competes in the secure access service edge or SASE market with a platform that provides networking features for enterprises to securely and rapidly transport data between different physical locations. The company’s approach of integrating networking and security eases infrastructure management, since the two tasks were traditionally fulfilled by enterprises using different products, often from different suppliers.

The Cato SASE Cloud platform runs on a global network backend that consists of more than 65 points of presence worldwide. With this network, organizations can route data traffic to various cloud environments, data centers, offices, shops and other sites. The network is also ideal for supporting remote workers, a capability that has become especially appealing in recent times, according to the company.

Cato’s cybersecurity layer, meanwhile, consists of a firewall for blocking unauthorized connections, a malware detection tool and various other related software components designed to prevent hackers. One of the most recent additions to Cato’s armory is a machine learning system that helps to reduce the number of false positives in threat detection. It works by identifying security alerts that erroneously flag legitimate data traffic as malicious, and filters them to reduce the number of unnecessary investigations that security teams need to carry out.

Cato Networks faces numerous competitors in the crowded SASE space, including VMware Inc., Palo Alto Networks Inc. and Fortinet Inc., but Chief Marketing Officer Yishay Yovel insisted the company is the clear leader in this emerging segment.

“Cato is the only global cloud-native SASE platform that can connect and secure the complete enterprise of users, locations, and applications with a single converged architecture and a single management console,” he told SiliconANGLE.

In contrast, he said VMware, Palo Alto and Fortinet’s SASE offerings are simply integrations of appliances and cloud services that resulting from multiple acquisitions, he said. With them, enterprises are forced to configure individual components separately, he said, so they lack the consistent optimization and security policy enforcement for all traffic, all users and all locations that Cato provides.

“For customers, Cato deploys faster, consistently delivers on a wide range of use cases and business requirements anywhere in the world, is self-maintaining and self-healing, and provides a great self-service interface for analytics and configuration,” Yovel said.

The CMO added that “dozens of enterprises” seem to agree, which is why they’re spending more than $250,000 in annual recurring revenue on its network and security tools, representing a 163% year-over-year increase. The company also has “several” global enterprise customers spending more than $1 million in ARR, he said.

One of them is the global business advisory, tax and assurance firm Baker Tilly International Ltd., which said Cato’s SASE platform has helped to transform the way it connects its employees and its network of offices around the world.

“Cato made us nimble, enabling us to address significant business changes such as M&A with near zero effort,” said Matt Jennings, Baker Tilly’s director of enterprise technology. “No more product-by-product configuration, updates and troubleshooting – just getting things done, quickly.”

Yovel also highlighted Cato’s growth, saying remote user adoption grew sixfold over the last year, thanks in part to the coronavirus pandemic. However, he insisted Cato’s growth is being driven by far more than just the remote work trend. He pointed out that the entire concept of SASE is to support the much larger trend of on-premises information technology infrastructure being migrated to cloud-native services. Enterprises are shifting to the cloud to become more agile, and Cato enables them to address the requirements around networking and security necessitated by that shift, he explained.

“This is the real promise of SASE and of Cato and the core need that drives our growth,” Yovel said.

Cato Networks said in a release that today’s funds will be invested to ensure it can provide greater scale and deeper security inspection for some of its biggest enterprise customers. A big chunk of the funds will therefore be used to build out the company’s networking infrastructure, with the rest earmarked to grow its sales and business teams.

Photo: Cato Networks