US — TechCrunch

Upwind raises $400M after walking away from Datadog acquisition offer

SecurityOctober 29, 20261 min read

Upwind, a San Francisco cybersecurity startup, raised $400 million at a $3.8 billion valuation. It turned down a takeover offer from Datadog to stay independent.

What happened

Upwind uses AI to protect cloud computing systems. It raised a $400 million Series C round, led by Bessemer Venture Partners. Older investors Greylock Partners and Craft Ventures also put in money. Datadog had tried to buy the company. Datadog did not offer more than the $3.8 billion value that investors had set, so Upwind said no and kept going on its own.

Key numbers

Round size: $400 million (Series C)
Valuation: $3.8 billion, up from $1.5 billion nine months earlier
Yearly recurring revenue (ARR) is adding $20 million to $30 million each quarter
Expected ARR at year end: about $90 million
Valuation is more than 40 times forecast ARR

Some background

Upwind was founded four years ago by Amiram Shachar. Shachar earlier sold his cloud cost company, Spot.io, to NetApp for $450 million. Upwind's method is called runtime security. This means it finds and fixes attacks and weak spots in software while that software is running. Companies pay more for AI tools that protect them from AI-driven threats.

Why it matters

Upwind's choice shows that its leaders think the company can be worth more than $3.8 billion later. Still, few cybersecurity companies have gone public recently, so a sale to a bigger company is still the most likely future for Upwind. The deal also shows how much investors are paying for fast-growing AI software.

What to watch

Whether Upwind goes public or is bought by another company
Whether its yearly revenue reaches the roughly $90 million forecast
How other AI cybersecurity startups are valued, such as Cyera at 80 times ARR
Whether Datadog or others make new offers

Glossary

Series C: A later round of money raised by a startup, after earlier rounds, usually from investors who buy part of the company.
Valuation: The amount of money a company is worth, based on what investors agree to pay for a share of it.
Datadog: A public company that sells tools to monitor how software runs.

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