This fresh capital injection comes just nine months after Upwind closed its previous major financing milestone—a $250 million round in January that valued the startup at $1.5 billion. The sheer velocity of these funding rounds highlights the explosive demand for advanced cloud security solutions as organizations worldwide navigate an increasingly complex and dangerous digital threat landscape driven by artificial intelligence.
However, the path to closing this latest $400 million round was not entirely straightforward. According to a person familiar with the matter, the funding agreement had been in the works for months and nearly fell apart entirely when Datadog attempted to acquire the startup. Datadog, a major publicly traded technology company that sells observability tools for monitoring software performance and execution, stepped in with buyout ambitions.
Ultimately, the acquisition talks broke down because Datadog did not offer a financial premium above the $3.8 billion valuation that had already been established by the venture capital investors. Given the competing offers and the company’s strong trajectory, Upwind ultimately decided to decline the acquisition overture and remain an independent entity, charting its own course in the booming cybersecurity market.
Founded by Amiram Shachar—an entrepreneur with a proven track record who previously sold his cloud spend management startup Spot.io to NetApp for $450 million—Upwind has experienced extraordinary growth since its inception. The startup has been consistently adding between $20 million and $30 million in annualized recurring revenue each quarter. According to a person familiar with Upwind’s internal financials, the company is projected to close out the year at roughly $90 million in ARR.
This financial milestone means that both the venture capital syndicate and Datadog valued the young startup at more than 40 times its forecast annual recurring revenue. In the software industry, ARR multiples serve as a standard yardstick for pricing and valuation. While a 40x multiple reflects immense investor confidence and high growth expectations, it is worth noting that it still sits well below the staggering 80x ARR multiple fetched by Cyera, another exceptionally fast-growing cybersecurity startup that captured headlines earlier in the year despite operating losses, as detailed in previous TechCrunch reporting.
The intense investor appetite for cybersecurity assets aligns with broader macroeconomic and technological trends sweeping through the enterprise software sector. Tomasz Tunguz, a general partner at Theory Ventures, recently wrote in his widely read industry blog that cybersecurity is poised to become the third major wave of AI software that enterprise customers are genuinely willing to open their budgets to pay for. This anticipated wave follows hot on the heels of the initial market booms for AI coding assistants and AI-driven customer support tools.
By walking away from Datadog’s acquisition bid, Upwind’s leadership team has signaled a strong institutional belief that the company will ultimately scale to a valuation significantly higher than the $3.8 billion price tag that was on the table. Yet, market realities remain a factor. Given how few cybersecurity startups have successfully executed initial public offerings in recent years amid a cautious public market environment, an eventual corporate acquisition continues to remain the most statistically probable long-term outcome for the venture.
Despite turning down Datadog’s advances, Upwind continues to draw significant acquisition interest from other industry players, according to sources familiar with the company’s ongoing business development and strategic discussions. The competitive landscape for advanced cloud security remains cutthroat, driven by the unique technical architecture that Upwind brings to the market.
Upwind differentiates its security platform through what it defines as "runtime" security. Traditional cloud security tools often focus strictly on static code analysis or configuration checks before deployment. In contrast, Upwind’s runtime approach actively monitors, alerts, and remediates attacks, vulnerabilities, and misconfigurations in active, running cloud services in real time. This immediate, operational visibility has resonated strongly with enterprise customers grappling with sophisticated cyber threats that exploit runtime environments.
TechCrunch has reached out to both Upwind and Datadog for official comment regarding the financing round and the reported acquisition discussions. As the cybersecurity sector continues to absorb massive influxes of capital and navigate consolidation pressures, Upwind stands out as one of the most closely watched independents in the enterprise technology ecosystem.
