Cato Networks acquired AI cybersecurity firm Aim Security, while announcing an extra $50 million in funding.

Following on from last week’s reports, Cato acquired the Tel Aviv-based entity for an undisclosed amount, with sources putting the figure at around $350 million.

Aim Security, which was founded in 2022 by veterans of Israel cybersecurity intelligence agency Unit 8200, specializes in securing enterprise use of large language models (LLMs) and generative AI.

Cato Networks currently leverages AI to enhance its secure access service edge (SASE) platform through threat detection and policy automation, with the deal integrating Aim's specialized AI governance capabilities.

“AI transformation will eclipse digital transformation as the main force that will shape enterprises over the next decade,” Cato CEO Shlomo Kramer noted in a statement. “With the acquisition of Aim Security, we’re turbo-charging our SASE platform with advanced AI security capabilities to secure our customers’ journey into the new and exciting AI era.”

Aim and AI

Prior to the deal, Aim Security secured roughly $28 million in funds through two financing rounds. Its backers include YL Ventures, CCL (Cyber Club London), the founders of potential Google acquisition Wiz, and angel investors affiliated with Google, Palo Alto Networks, and Proofpoint.

The firm’s focus is on AI agents and shadow AI, the low-key, unmanaged usage of AI apps in an organization which can lead to unsanctioned and invisible data leaks.

That networking threat has seen a response from CloudFlare, which recently updated its zero trust service with AI Security Posture Management (AI-SPM) integration in a bid to tackle shadow AI. Rivals such as Zscaler and Palo Alto already offer similar services.

Almost inversely, the AI agent problem relies not on employees using unauthorized AI apps within organization settings – but on AI "employees" deployed by an enterprise.

Cisco recently suggested to SDxCentral that the growing number of AI agent deployments will become equivalent to “80 billion” users, posing a massive identity challenge for networks in the future. In turn, vendors like CrowdStrike have released recent solutions to identity agents on the network, similar to Aim Security’s.

Cato Networks, meanwhile, received recognition for its agentic AI plans from Gartner in the analyst firm’s latest SASE provider rankings.

Cato Networks to date

Cato extended its Series G round with a $50 million investment from Acrew Capital, bringing its total capital raised to $409 million. The firm also surpassed $300 million in annual recurring revenue (ARR).

Founded in Tel Aviv in 2015, the firm achieved unicorn status following an October 2021 funding raise.

Cato then raised $359 million in a funding round this June, securing backing from the likes of Vitruvian Partners and ION Crossover Partners to take its valuation to more than $4.8 billion.

The investment was made to expand Cato into AI use cases across SD-WAN, IoT security, and zero-trust network access (ZTNA).

Earlier this year, Cato integrated Amazon Bedrock into its SASE Cloud platform, allowing users to develop custom foundation models.

Most recently, the firm named Eyal Heiman as CTO, with Heiman coming across from Akamai Technologies.