Cato Networks Lands $30M Series B Funding, Looks To Disrupt Network Security With Help Of Channel

Cato Networks landed $30 million in Series B funding as it continues to invest in moving its disruptive software-defined network security offering through a 100 percent channel model, the Tel Aviv-based startup said Tuesday.

The funding adds to the $20 million in Series A funding the security startup landed in June 2015. This latest round was led by Greylock Partners, with participation from Singtel Innov8, U.S. Venture Partners, Aspect Ventures and founders Shlomo Kramer and Gur Shatz.

The funding round comes on the heels of the ’excellent traction’ Cato Networks has seen since it officially launched into the market in February, co-founder and CEO Kramer told CRN. Kramer said the funding is validation of the company’s technology, which looks to disrupt the firewall appliance and MPLS markets with its cloud-based network security offerings.

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’We are really excited to get this class [of investors] and their funding,’ Kramer said. ’I think that speaks volumes to the fact that these investors think this is the future of network security.’

The company's Cato Cloud platform uses the cloud to consolidate WAN and internet traffic, and layer enterprise-grade security offerings -- such as a next-generation firewall -- on top. The offering has two primary parts: the Cato Cloud Network, which consolidates and encrypts all enterprise network elements using a global network of points of presence, and the Cato Network Security Services, which then adds enterprise-grade security offerings on top of the network.

’This is a completely revolutionary approach in the market and we just launched the service and we have big plans here. I think this platform really enables us to do things that nobody has done before. For the first time, we are converging networking and network security into a single stack in the cloud. This is a long-term technology platform to bring to customers,’ Kramer said.

Cato Networks goes to market 100 percent through the channel, launching its PartnerCloud Program in March under the leadership of Vice President of Sales Glenn Esposito. That program includes incentives and programs for VARs, MSSPs and ISPs.

Kramer said the new round of funding will allow Cato Networks to invest further in the channel, including investments in channel marketing, enablement, field marketing, events and international expansion. He said Cato Networks is focusing on recruitment of quality, strategic partners, with ’tens’ of partners already signed up.

’We are definitely seeing partners, the smart partners, strategically building their portfolio of cloud services and … saying we understand this [market] is going to the cloud and we need to build up the right portfolio to be ready for it. Those are the types of partners we are looking for and are interested in working together with us to make the best of this transformation,’ Kramer said.

The funding will also be put toward technology expansion, Kramer said, including building out the company’s cloud network to more locations and deepening its security stack. Those investments will allow Cato Networks to capitalize on what Kramer estimates is a $72 billion market opportunity, he said.

Michael Ortega, senior solutions architect at Internetworx, a Dallas-based Cato Networks partner, said he hopes the new funding will allow Cato Networks to further invest in growth initiatives for the channel, whether that means recruiting new partners or hosting more promotional events to get the product in front of more end users.

’For [Cato Networks], my belief is that simply showing the channel community that it works will likely manifest in an explosion of growth. As a result of that growth, it’s particularly important to continue to invest, now or in the very near future, in educating the channel and growing the in-house technical support team,’ Ortega said.

Ortega’s company has been working with Cato Networks since January. He said the Cato Networks offering allows his MSP business to get the benefits of several different offerings in one product and one interface. Ortega said he also hopes Cato Networks continues to invest in its product, which he said gives his business a way to easily sell security as-a-service to its customers.

’I think too many technology companies out there, after acquiring a comfortable market share, grow complacent. They lose in the effectiveness of their product[s] and stop innovating. Then they start to lose. We love working with companies like Cato who are not afraid of new approaches and new innovations. Just keep it effective and applicable. That’s all we need,’ Ortega said.