Upwind raises $400M after walking away from Datadog acquisition offer

Key points

• Upwind raised $400 million in a Series C round at a $3.8 billion valuation led by Bessemer Venture Partners.
• The San Francisco startup rejected a Datadog acquisition offer that did not exceed the $3.8 billion valuation.
• Upwind is projected to end the year at roughly $90 million in annualized recurring revenue.

Upwind, a San Francisco startup that uses AI to secure cloud infrastructure, has raised a $400 million Series C round at a $3.8 billion valuation. The round was led by Bessemer Venture Partners, with participation from existing backers including Greylock Partners and Craft Ventures.

The financing comes nine months after Upwind closed a previous $250 million round at a $1.5 billion valuation. According to a person familiar with the company, the new funding nearly fell apart after Datadog attempted to buy Upwind.

Datadog offer rejected

Datadog, a publicly traded company that sells observability tools for monitoring software, did not offer a premium above the $3.8 billion valuation set by venture capital investors, the person said. Upwind therefore decided to remain independent.

Upwind continues to draw acquisition interest, according to a person familiar with the company.

runtime

— Upwind

Rapid revenue growth

Four-year-old Upwind has been adding $20 million to $30 million in annualized recurring revenue each quarter and is projected to end the year at roughly $90 million, according to a person familiar with its financials. That means investors valued the startup at more than 40 times its forecast ARR.

The startup was founded by Amiram Shachar, who previously sold cloud spend management startup Spot.io to NetApp for $450 million. Upwind describes its approach as runtime security, which alerts and remedies attacks and vulnerabilities in active services in real time.