Staying Independent: Upwind Secures $400M Valuation Surge After Walking Away From Datadog Buyout

Cloud security startup Upwind raised $400 million in a fresh Series C funding round that values the company at $3.8 billion. Venture firm Bessemer Venture Partners led the massive investment round, with existing backers Greylock Partners and Craft Ventures joining to increase their financial stakes. The huge capital influx arrives just nine months after the San Francisco startup closed a $250 million financing round at a $1.5 billion valuation.

The funding deal follows intense buyout negotiations behind closed doors. Publicly traded cloud monitoring platform Datadog attempted to acquire Upwind outright during the planning stages of the investment round. However, Datadog refused to offer a acquisition premium above the $3.8 billion valuation target set by prospective venture capital investors. Upwind executives rejected the buyout proposal, choosing to stay independent and build out their product footprint.

Four-year-old Upwind experienced rapid revenue expansion driven by rising demands for automated cloud defense tools. The company adds between $20 million and $30 million in annualized recurring revenue every quarter, putting it on track to hit approximately $90 million in total annualized revenue by the end of the year. Paying a $3.8 billion valuation on $90 million in forecast revenue means venture investors valued the startup at more than 40 times its annual earnings. While that price tag seems high, it remains below the 80x revenue multiple that rival cloud security provider Cyera commanded during its financing round earlier this year.

Venture investors view cloud security as a major growth area for software spending, trailing right behind automated coding tools and customer support platforms. Theory Ventures partner Tomasz Tunguz noted that companies now prioritize spending heavily on security automation to protect complex cloud environments. By turning down Datadog’s acquisition offer, Upwind leadership bet that building an independent company will deliver a higher valuation than early buyout offers. However, with few cybersecurity firms completing public market listings in recent years, an eventual acquisition by a larger tech player remains a likely path forward for the startup.

Upwind continues to draw strong buyout interest from major cloud monitoring and software security providers across the industry. Serial entrepreneur Amiram Shachar founded the startup after selling his previous cloud management platform, Spot.io, to storage giant NetApp for $450 million. Under Shachar’s leadership, Upwind built a specialized defense approach focused on runtime security. Instead of relying solely on static code scans before software deployment, Upwind’s runtime platform monitors active cloud workloads continuously, alerting security teams to live threats and applying automated fixes in real time.

Securing $400 million in fresh capital gives Upwind deep financial reserves to scale engineering teams, expand global sales operations, and build advanced runtime security features. As corporate networks migrate sensitive workloads into complex cloud environments, real-time threat detection becomes essential for preventing costly data breaches. Rejecting a major buyout offer shows that Upwind intends to challenge established cloud security vendors head-on while building a dominant position across the software security market.