Cyber unicorn Cato acquires Aim Security for $350 million amid AI cyber arms race

The arms race for AI technologies and talent is in full swing - this time in an all-Israeli deal. Shlomo Kramer’s cyber unicorn, Cato Networks, is acquiring the young startup Aim Security for an estimated $300–350 million in cash and shares. This represents a swift and successful exit for a company founded just two and a half years ago, employing around 30 people and having raised $28 million to date.

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The biggest beneficiaries of the sale are founders Matan Getz (CEO) and Adir Gruss (CTO), along with the funds that invested in two rounds: the American Canaan Partners, Yoav Leitersdorf’s YL fund, which specializes in cyber, and the CCL Fund (Cyber Club London). Several senior cyber industry executives also invested in Aim, including some founders of Wiz and executives from Google and Palo Alto Networks.

Aim was founded by Getz and Gross, who worked on integrating AI technologies with cybersecurity during their service in Unit 8200 of the IDF. The increasing adoption of AI in organizations is a boon for businesses, but it presents unique challenges for CISO’s, who must balance business efficiency with regulatory and security requirements. Aim’s platform enables employees to use AI agents securely, leveraging AI-based development tools such as Cursor, without exposing organizations to undue risk.

The Aim acquisition is the fifth in the emerging field of AI-driven cybersecurity and continues a trend that began last year, focusing on young Israeli startups founded since 2023 that have raised modest amounts. While not billion-dollar exits, these deals have offered investors quick returns. About a month ago, Prompt Security was sold to Israeli-founded SentinelOne for an estimated $250 million, another all-Israeli transaction. In the past six months, Palo Alto acquired the American firm Protect AI for $700 million, and Tenable bought Israeli Apex for $100 million. A year ago, Robust, founded by Israelis in the U.S., was acquired by Cisco for $500 million.

Several other companies remain on the market, including Israeli startups Lasso Security and Pillar. Another strong player, Noma, raised $100 million a month ago and currently plans to continue independently. According to sources, cyber giants such as Check Point, F5, Akamai, and Cyera are expected to pursue acquisitions in this space. According to sources, Akamai and Check Point competed for Aim, but Cato ultimately prevailed with a higher offer.

The rise of AI has disrupted cybersecurity at every level: attackers are using AI to craft toxic prompts, while employees increasingly risk leaking sensitive information when using tools like ChatGPT. At the same time, AI is accelerating defensive solution development. In 2024, revenues from AI cybersecurity solutions reached $24 billion, mostly flowing to major players. Research firms project this niche to grow at an annual rate of 25%, reaching $100 billion by 2030. Early-stage acquisitions provide buyers not only with technology but also with teams experienced in AI, mirroring Silicon Valley’s race to secure AI talent.

Shlomo Kramer.

For Cato, this is its first acquisition and a significant financial step. The company had raised $359 million at a $4.8 billion valuation in June and recently expanded the round by $50 million from Acrew Capital, bringing total fundraising to $409 million, enough to cover the Aim acquisition. Cato also updated its annual revenue rate, surpassing $300 million after reporting $250 million earlier this year, a 46% increase.

Founded in 2015 by Kramer, one of the founders of Check Point and Imperva, and Gur Schatz, Cato employs 1,400 people, half in Israel, and has raised $1.1 billion to date. The company aims to list on Nasdaq, but current conditions require revenues above $300 million, rapid growth, and profitability to attract investors. A pioneer in the SASE market, Cato provides cloud-based remote connection solutions, catering to the hybrid work environment.

“AI transformation will eclipse digital transformation as the main force that will shape enterprises over the next decade,” said Shlomo Kramer, CEO and co-founder of Cato Networks. “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.”