Upwind Raises $400 Million After Walking Away From Datadog Acquisition Offer

Upwind, a San Francisco-based cloud and AI security startup, has raised $400 million in a Series C round that values the company at $3.8 billion. The financing, led by Bessemer Venture Partners, comes nine months after a $250 million Series B that valued Upwind at $1.5 billion. Reports indicate the company walked away from an acquisition approach by Datadog that did not offer a premium above the new valuation. The round brings Upwind’s total funding to more than $800 million since its founding in 2022. Existing investors including Greylock Partners, Craft Ventures, Salesforce Ventures, TCV, and others participated, along with new investor Canapi Ventures. The company said the capital will support product development and go-to-market expansion for its runtime-focused cloud security platform. Datadog Interest and Decision to Stay Independent According to people familiar with the process, Datadog explored acquiring Upwind. One account stated that Datadog did not offer a premium above the $3.8 billion valuation set by the venture investors, leading Upwind to remain independent. Other reports referenced an offer near $4 billion. Some Israeli media noted conflicting details about whether a formal offer was extended. Upwind’s announcement did not mention the acquisition discussions. By declining the approach, Upwind signaled confidence that its independent trajectory could support a higher valuation. The company has grown rapidly amid rising demand for security tools that address AI-driven workloads and complex cloud environments. Annual recurring revenue is estimated in the range of $80–90 million for 2026, with the company adding tens of millions in ARR per quarter and reporting that revenue has quadrupled this year. Business and Market Context Upwind provides a runtime-native platform that gives organizations visibility into networks, APIs, and data flows while systems are operating. Customers include Siemens, Roku, Nubank, and others. The platform integrates with major cloud providers including AWS, Microsoft Azure, Google Cloud, and Oracle Cloud. The company was founded by Amiram Shachar and colleagues from Spot.io, which NetApp acquired for approximately $450 million in 2020. The funding occurs as cybersecurity is viewed by some investors as a major growth area in AI software, following coding tools and customer support applications. Upwind has positioned itself as one of the most heavily capitalized companies focused on cloud and AI security. The valuation increase from $1.5 billion in January to $3.8 billion in October reflects strong investor interest in the category. What to Watch How Upwind deploys the $400 million across product development, engineering, and sales. Further growth in annual recurring revenue and customer expansion. Any subsequent reports on acquisition interest or partnership discussions. Competitive developments in runtime cloud security and AI workload protection. The broader funding environment for cybersecurity startups. Public comments from Upwind leadership on strategy and independence. Upwind has raised $400 million at a $3.8 billion valuation after walking away from a reported Datadog acquisition offer that did not include a premium. The Series C, led by Bessemer Venture Partners, supports continued growth of its cloud and AI security platform as revenue has quadrupled and total funding exceeds $800 million.