Upwind has raised a $400 million Series C at a $3.8 billion valuation, led by Bessemer, with existing backers Greylock Partners and Craft Ventures participating. The round lands nine months after the San Francisco company closed $250 million at a $1.5 billion valuation.
It nearly did not happen the way the founders planned. According to a person familiar with the matter cited by TechCrunch, Datadog — the publicly traded observability company — attempted to buy Upwind, and did not offer a premium above the $3.8 billion that venture investors had already set. Upwind chose to remain independent rather than accept a flat price with no upside for staying.
The financials behind that decision: Upwind is adding $20 million to $30 million in annualized recurring revenue each quarter and is projected to end 2026 at roughly $90 million ARR, according to the same person. At $3.8 billion, both the VCs and Datadog priced the four-year-old company at more than 40 times forecast ARR. That is expensive — and still well below the roughly 80 times ARR that investors reportedly paid for rival Cyera earlier this year.
Upwind sells what it calls runtime security: AI-driven detection and remediation for cloud infrastructure, aimed at attacks and vulnerabilities in services that are already live rather than at the design stage. Founder Amiram Shachar previously built cloud-spend startup Spot.io, which NetApp bought for $450 million.
Why it matters. Cybersecurity is being pitched as the third wave of AI software that enterprises will actually pay for, after coding tools and customer support — a thesis venture investor Tomasz Tunguz of Theory Ventures has argued publicly. Upwind's round is a direct bet on that ordering, and Datadog's interest shows the incumbents would rather buy the category than build it.
Walking away from an acquisition is also a statement about exits. Very few cybersecurity companies have gone public in recent years, which makes an eventual sale the most likely outcome for Upwind anyway; the company is reportedly still drawing acquisition interest. Refusing a flat offer buys time to grow into a higher price — or to regret the certainty that was on the table.
Caveats worth keeping in view: the ARR figures and the Datadog offer both come from a single person familiar with the company, not from audited statements, and neither Upwind nor Datadog commented on the record. A $3.8 billion mark is a private valuation set in a funding round, not a market price — the gap between the two is exactly what an IPO would test, and few security startups have been willing to run that test.
