A Centaur in the Channel? SASE Provider Cato Networks Eclipses $100 million ARR

Secure access service edge (SASE) pioneer Cato Networks exceeded $100 million in annualized recurring revenue, vaulting itself and its partners into the vaunted “centaur” category.

Cato announced the milestone just two years after reaching the “unicorn” status of a $1 billion valuation. And more importantly, the firm only took five years to grow from $1 million in ARR to $100 million.

Tel Aviv-based Cato launched in 2015 under the leadership of cybersecurity veterans Shlomo Kramer and Gur Shatz. The company exited stealth in 2016, pitching itself to customers and partners as a network (especially SD-WAN) services provider that offered embedded, cloud-based security features on its platform. That natively built convergence drew the attention of investors, especially as the pandemic highlighted the challenges businesses faced in securing their distributed workforces.

Cato Networks’ Alon Alter

Cato chief revenue officer Alon Alter said Cato is disrupting the networking and security industries in the same way the next-gen firewall did almost two decades ago.

“The simplicity, agility, visibility, and control of the Cato SASE Cloud brings world-class security protection and optimal network performance to businesses of all sizes. Driven by security and networking experts, Cato has the right service DNA and technology to become the mission-critical platform for the digital enterprise.”

Now more than 1,500 have adopted the Cato SASE Cloud platform. The platform has gone on to add CASB in 2022, in addition to other security features.

The Channel

The company drove many of its early deals with MSPs and VARs and also grew its presence in the TSD/agent channel. The company recently scored at the top of Avant’s SD-WAN category and Telarus’ cybersecurity category.

It has also moved into the communications service provider market, partnering with companies like U.S. ILEC/CLEC Windstream Enterprise and Japanese telecom operator KDDI.

KDDI’s Toru Maruta

Toru Maruta, an executive officer and head of product management at KDDI, said tapping into SASE has allowed customers to enable hybrid work.

” Hybrid work is achieved through the combination of various components including local breakout with SD-WANs, remote access with SSEs, and endpoint protection with EDR,” Maruta said. However, combining and smoothly managing a variety of components is a large pain point for corporate IT managers. Cato’s full package makes it easy to combine and manage such services, and it has won the approval of many customers. The partnership between KDDI, with its long years of experience providing and operating network services, and Cato, with its full package SASE solution, represents the optimal solution for corporate IT environments that aim to accelerate their digital transformation.”

Source: Cato and Bessemer Venture Partners

According to Bessemer Venture Partners, which created the “centaur” term for privately held SaaS companies, centaurs earn more than $100 million in recurring revenue. Consumer brands like Wix, LinkedIn, Shopify and Twilio also have earned the label. Cato’s secure networking rival Aryaka Networks, founded in 2009, also boasts more than $100 million in annualized recurring revenues.