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Upwind raised $400M at $3.8B after walking away from Datadog
Upwind raised a $400 million Series C at a $3.8 billion valuation. It rejected a Datadog offer at the same price.
Image: TechCrunch
Why it mattersCloud security is where buyers are spending AI budget next. Upwind priced that view at 40 times its forecast revenue, and chose a round over a sale.
A four-year-old cloud security startup priced itself higher than a public buyer was willing to pay. TechCrunch reported on Wednesday that Upwind closed a $400 million Series C at a $3.8 billion valuation. Upwind is a San Francisco company. Its product uses AI to secure cloud infrastructure. Bessemer Venture Partners led the round. Greylock Partners and Craft Ventures also took part.
The round nearly fell apart. TechCrunch said that Datadog tried to buy Upwind during the raise. Datadog is a public observability company. The offer did not go above the $3.8 billion the venture investors were ready to pay. Upwind chose to stay independent and take the money, TechCrunch said.
The numbers Upwind priced itself on
Upwind closed its last round nine months ago at $1.5 billion. The new valuation is more than twice that. TechCrunch said a person close to Upwind gave the growth number. The company has been adding $20 million to $30 million in annualised recurring revenue each quarter. It is forecast to end the year near $90 million.
That puts the $3.8 billion price at about 40 times forecast ARR. The multiple is a common software yardstick. TechCrunch noted that Cyera, another fast-growing security startup, fetched 80 times ARR earlier this year. So Upwind is priced at half what Cyera got, on the same yardstick.
Why cloud security sits here now
Upwind's founder is Amiram Shachar, who sold his previous company, cloud-spend startup Spot.io, to NetApp for $450 million. His pitch for Upwind is runtime security: alerts and fixes for live services as they run, rather than only pre-production scans.
Buyers are paying for that work for a plain reason. AI coding tools write more code every week. That means more services to defend and more mistakes to catch. TechCrunch cited Theory Ventures general partner Tomasz Tunguz. He wrote that cybersecurity is the third big wave of enterprise AI spend. The first two were coding tools and customer support.
Upwind is still drawing acquisition interest after the round, TechCrunch said. The company declined to comment. So did Datadog.
A buyer picking a cloud security vendor in 2027 now has a signal. One of the fastest-growing startups in the space passed on an exit from a public rival. Its investors funded it to compete head-to-head instead. That changes the shortlist. A team picking a runtime security vendor should expect this market to stay independent for another cycle. Each side will market harder. Nobody banking on a clean exit should expect one soon.
Source
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