Israeli cybersecurity company Cato Networks is mulling a sale, sources inform "Globes." The company, one of the biggest privately-held cybersecurity companies in Israel, develops Secure Access Service Edge (SASE) technology, which combines enterprise communication and security capabilities into a single cloud-based platform, is still considering a flotation at a company valuation of $4.5 billion, as reported recently by "The Information" but at the same time is conducting unofficial talks with strategic players in the industry to examine an exit.
According to sources familiar with the talks, it is the investment banks supporting the company in its planned IPO, which are encouraging Cato Networks to consider a faster deal, given the ongoing stagnation in the IPO market. However, the same sources say that a recurring theme in these exploratory talks is that Cato Networks is seen as overpriced.
Valuation gaps between fundraising and exit
Last month, it was reported that Cato Networks seeking to raise about $150 million for the company, and further similar amount in a secondary transaction to so that existing investors could sell shares. The $4.5 billion valuation sought was a sharp increase from the $3 billion valuation in the company's most recent financing round in September 2023. But market sources note, "Pricing does not reflect the current real conditions, neither in the IPO market nor in exits." Therefore, if a sale does indeed take place, it may be close to a lower valuation than Cato is seeking in the fundraising.
Cato Networks was founded in 2015 by CEO Shlomo Kramer, one of the leading figures in Israel's cybersecurity industry. The company has developed a platform that aims to streamline and consolidate the activities of an enterprise, mainly in the cloud. Instead of using several separate systems for data security, remote connections (VPN), and firewalls, Cato unifies everything into one platform.
The system is specifically designed for organizations that operate from many locations worldwide, with employees who work from home or on the road, and with technological infrastructures that are distributed between local data centers and cloud services. Last February, Cato announced it had reached annual recurring revenue (ARR) of $250 million, with a growth rate of 46% per year. It has hundreds of employees and operates globally.
No response to this report has been forthcoming from Cato Networks.
Published by Globes, Israel business news - en.globes.co.il - on May 22, 2025.
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