Secure access service edge (SASE) vendor Cato Networks today banked $238 million in equity investment, leading the company to a valuation of over $3 billion. Cato Networks cofounder and CEO Shlomo Kramer said this record-breaking funding round showed investors’ confidence in Cato’s leadership in the single-vendor SASE market.

The round, the largest in the company's history, was led by LightSpeed Venture Partners with participation from Adams Street Partners, Softbank Vision Fund 2, Sixty Degree Capital and Singtel Innov8. Ravi Mhatre, founder and managing director at LightSpeed, will join Cato's board of directors.

So far, Cato has raised total funding of $773 million over eight rounds. In October 2021, the vendor secured $200 million in its Series F funding round, which pushed the company's valuation north of $2.5 billion.

Cato plans to use the latest investment to accelerate its growth in three main areas: bringing Cato's vision and customer success to a broader audience, expanding its partner ecosystem to offer managed Cato SASE services and growing the engineering and product team for innovation.

Started in early 2015 by Shlomo Kramer, who also cofounded Check Point Software and Imperva, and Gur Shatz, cofounder of Incapsula, Cato has been building a converged cloud-based platform delivering security and networking capabilities.

In 2022, the company crossed the $100 million annual recurring revenue (ARR) mark and grew its revenues at over 60% year over year. The growth is driven by the single-vendor SASE trends.

Kramer told SDxCentral that the future of security is converged platforms, suggesting that the multivendor SASE category is "essentially dead."

He added the last and only important player in multivendor SASE is Zscaler, which recently rolled out network hardware, which is not SD-WAN but will soon be SD-WAN. “So they are scrambling to fix their strategic level.”

Every business wants to be a digital business, but many of them are stuck in “the old days of appliances and point solutions,” Kramer said.

To address this issue “we have built this platform from the ground up as a converged networking and network security. And the value is the customer experience and the ability [to enable] IT security finally to move at the speed of bigger business and address the requirements they have within a limited budget,” he added.

Forrester Research recently labeled Cato as a leader in their Wave report on Zero-Trust Edge (ZTE) Solutions for Q3 2023, while Gartner named it as a challenger in its Magic Quadrant for Single-Vendor SASE.

“Cato Networks is the poster child for ZTE and SASE,” Forrester analysts wrote in the report. “Cato has a strong strategy paired with a truly unified networking and security solution and has shown real security innovation within its single-pass architecture platform. ”

However, Gartner analysts cautioned in the report that Cato is more aligned with midmarket and small and midsize business (SMB) customers’ needs, and “its planned product innovations are unlikely to disrupt or shape the broad enterprise market.”

Kramer pointed out that Cato last month announced Carlsberg Group as its latest enterprise customer.

The group is the third largest brewer in the world with $10.6 billion in revenue spanning over 140 brands, according to Cato. The single-vendor SASE deployment will span 200+ locations and 25,000 remote users worldwide for Carlsberg Group.

“We've got much larger customers in the pipeline that we will close in the next few quarters,” Kramer said. He added that the company is “going upmarket to larger customers and we're doing that very successfully. Next year … I hope we can talk about $10 million customers and in two years about $40 million customers, and our platform is ready today.”

Additionally, “we are not amid the enterprise market. The buying patterns of the enterprises need to mature to single-vendor SASE,” he argued.

Including enterprises like Carlsberg and TAG Heuer Porsche Formula E, Cato claims to now have more than 1,800 enterprise customers.