Israeli Cyber Firm Cato Networks Facilitates $100 Million Employee and Investor Liquidity Event

Israeli cybersecurity company Cato Networks has completed a secondary transaction valued at approximately $100 million, allowing hundreds of employees and existing investors to cash out some of their holdings. This secondary market deal enables stakeholders to convert their shares into liquid assets without waiting for an initial public offering or a company sale.

This is the second significant liquidity event for Cato Networks in just over a year, occurring as the company continues to expand its presence in the enterprise information security market. Unlike a typical funding round where new investment capital flows into the company, a secondary transaction involves the proceeds going to the selling shareholders. For employees holding options or shares, it offers a way to realize the value accumulated during their tenure, even while the company remains privately held. Existing investors can also partially exit their positions.

This latest transaction follows a substantial funding round in the summer of 2025, which initially raised around $359 million and later grew to approximately $409 million, valuing the company at $4.8 billion. That round also included a secondary transaction of about $120 million, where roughly 1,400 current and former employees cashed out shares. The valuation and specific breakdown of employee versus investor sales in the current $100 million deal are not yet public.

Cato Networks' secondary deal is part of a recent trend in the Israeli tech sector, where private companies are increasingly offering liquidity options to employees and early investors before a potential IPO or acquisition. Earlier this month, AI firm Wonderful completed a $170 million secondary deal alongside a $550 million funding round. These transactions reflect a shift in how private tech firms provide liquidity, moving beyond traditional IPOs or sales.

Founded in 2015 by cyber entrepreneur Shlomo Kramer and Gur Shatz, Cato Networks operates in the SASE (Secure Access Service Edge) space, integrating communication and security services on a cloud-based platform. The company reported over $415 million in annual recurring revenue (ARR), a 42% increase year-over-year, and serves more than 4,800 customers globally with over 1,900 employees, half of whom are in Israel. A company spokesperson stated, "Cato's success is built on our employees, who are top talent in the industry, and it is important to us that they share in the value they create and receive recognition for their contribution to the company's accelerated growth. We strive to balance the interests of our investors to increase their holdings with the desire to allow employees to benefit from the success they are part of."