Cato Networks Completes $100 Million Secondary Share Sale

Israeli cybersecurity giant Cato Networks has finalized a secondary transaction valued at approximately $100 million. This deal allowed hundreds of existing employees and investors to liquidate a portion of their holdings, converting their shares into cash without waiting for an initial public offering or a company acquisition. The transaction was reported by Globes.

Founded in 2015 by cyber entrepreneurs Shlomo Kramer and Gur Shatz, Cato Networks specializes in SASE (Secure Access Service Edge) technology, offering a cloud platform that integrates network infrastructure and cybersecurity for enterprises. The company has experienced significant growth, with its annual recurring revenue (ARR) surpassing $415 million, a 42% increase year-over-year.

Cato Networks currently serves over 4,800 global clients and employs more than 1,900 people, with about half of its workforce based in Israel. The company stated that its success is driven by its talented employees and that it aims to balance investor interests with enabling employees to benefit from the value they create.

This marks the second nine-figure secondary transaction for Cato Networks in just over a year. In the summer of 2023, the company completed a substantial funding round at a $4.8 billion valuation, which also included a significant secondary share sale for employees. That $359 million funding round saw approximately $100 million allocated to purchasing shares from long-term employees, providing many with hundreds of thousands of dollars.