Cato Networks Secures $359M at $48B Valuation, Delays IPO to Empower Employees

A New Milestone for Israeli Cybersecurity Amid Shifting IPO Winds

Cato Networks, a prominent Israeli cybersecurity firm, has just pulled off a massive financial coup, raising \$359 million in its Series G funding round. The company’s valuation surged to \$4.8 billion, a sharp rise from its previous \$3 billion mark in September 2023. This fresh capital brings Cato’s total funding past the \$1 billion threshold—an achievement that not only underscores its internal momentum but also reflects the broader resurgence of Israel’s cyber sector, hot on the heels of Cyera’s record-breaking \$540 million round at a \$6 billion valuation.

The new funding round was spearheaded by fresh entrants Vitruvian Partners and ION Crossover Partners, alongside Cato’s long-term supporters such as Lightspeed Venture Partners, Acrew Capital, and Adams Street Partners. However, what stands out most is that roughly a third of the raised capital—about \$120 million—came via a secondary share sale. This means it went directly to employees, giving long-standing staff a tangible reward for their loyalty and belief in the company, rather than solely pumping funds back into operations.

This secondary deal is particularly meaningful considering Cato’s IPO plans have been shelved again, despite previous signs pointing to a possible public debut in 2025. The company had even bolstered its board with notable figures such as Eyal Waldman, founder of Mellanox, and Gili Iohan, a seasoned CFO from Veronis and partner at ION. These moves suggested preparations were underway for a listing. Financially, Cato is strong—with a 46% year-over-year growth to a \$250 million annual revenue run rate—but it remains unprofitable, a factor that may affect its appeal in public markets.

Co-founder and CEO Shlomo Kramer, a legend in the cybersecurity space, clarified that this funding wasn’t about necessity. “We didn’t need the money to keep growing,” he stated. “This was about strategic opportunity—capital at an attractive valuation and a way to give back to our team.”

Founded in 2015 by Kramer and Gur Shatz, Cato Networks was created to disrupt the outdated, fragmented cybersecurity and networking infrastructure. Their solution? A Secure Access Service Edge (SASE) platform entirely built in the cloud. In a time where enterprise IT departments face overwhelming complexity, budget cuts, and rising threats, Cato delivers seamless, cloud-native security that replaces legacy firewalls, routers, and VPNs.

With the new capital infusion, Cato aims to aggressively innovate in the SASE space—particularly using AI—and tap into underexplored customer segments. While the SASE market is projected to skyrocket to \$28.5 billion by 2028, competition remains stiff, with industry titans like Palo Alto Networks, Fortinet, and Cisco vying for dominance.

What Undercode Say:

Cato Networks’ latest funding round isn’t just about raising money—it’s a calculated move signaling multiple strategic intentions. The \$359 million raise—especially the \$120 million portion allocated to employees through a secondary share sale—tells us the company is balancing growth with retention. In a hyper-competitive cybersecurity labor market, where poaching talent is common and burnout is high, allowing employees liquidity without an IPO is an underrated but potent retention strategy.

From a market signaling standpoint, the delay in IPO should not be viewed as hesitation but rather as positioning. By avoiding the unpredictable public market pressures of 2025, especially amid fluctuating interest rates and tech stock volatility, Cato gains the breathing room to reach profitability—potentially boosting its future IPO multiple. It also distances itself from recent disappointing tech IPOs, avoiding the risk of a valuation haircut.

Shlomo Kramer’s legacy plays a critical role here. Investors trust Kramer because of his proven record at Check Point and Imperva. His narrative power—transforming legacy infrastructure into a cloud-native, AI-first platform—resonates with institutional backers. This makes Cato one of the few late-stage unicorns that can command a premium valuation despite not being profitable.

Another overlooked factor is Cato’s choice to continue scaling its SASE and AI platforms. This suggests a strong commitment to product innovation, even as many tech companies are dialing back R\&D. The firm is not just trying to grab market share—it wants to redefine what cloud-native security infrastructure looks like. That ambition makes it a formidable competitor not just to traditional network security players, but to cloud-native disruptors too.

Furthermore, the Israeli cybertech ecosystem is regaining momentum despite geopolitical challenges. Cato and Cyera’s nearly \$1 billion combined raises within weeks hint at a broader investor belief in Israeli tech resilience. These companies are no longer just engineering shops; they are global category creators.

If Cato leverages this funding to solidify new use cases, fine-tune AI automation within its SASE platform, and break into underserved markets like mid-sized enterprises and emerging markets, it could edge out slower-moving incumbents.

🔍 Fact Checker Results

✅ Cato raised \$359M in Series G funding at a \$4.8B valuation.
✅ About 33% of this was secondary, benefiting employees.
✅ IPO plans are postponed but remain technically ready.

📊 Prediction

Cato is likely to delay its IPO until late 2026 or beyond, aiming to hit profitability and better position itself in a bullish market window. Given the current funding and solid revenue growth, it may cross \$400M in ARR by 2026, potentially achieving a valuation north of \$7 billion—especially if it carves out dominance in AI-integrated SASE solutions. The next frontier? Strategic partnerships or M\&A that further integrate AI and edge security, setting up Cato as either a giant-slayer or a prime acquisition target.