Upwind raises $400M at $3.8B after Datadog talks

Cloud security startup Upwind has raised a $400 million Series C at a $3.8 billion valuation, TechCrunch reported on October 28, 2026. The round comes days after reports that Datadog wanted to buy the company. Upwind chose to stay independent, which says a lot about how investors now price security tools for AI-heavy cloud systems.

Bessemer Venture Partners led the round. Greylock Partners and Craft Ventures also took part.

What Upwind sells

Upwind makes software that watches applications running in the cloud and flags attacks as they happen. According to The Paypers, its platform monitors cloud apps, including AI agents, and detects and responds to possible breaches.

The company was founded in 2022 and is based in San Francisco. Its founder and CEO, Amiram Shachar, sold his previous startup, Spot.io, to NetApp for $450 million, TechCrunch notes.

Upwind has also been buying. In September 2026 it acquired Aegis in a stock deal and set up Upwind AI Labs to focus on AI security, according to CTech by Calcalist.

The Datadog question

Datadog is a large monitoring company that has been pushing into security. In late October, The Information reported that Datadog had approached Upwind with an offer of nearly $4 billion. The Paypers, citing that report, said the bid was about $200 million above Upwind's private valuation and that Upwind had not accepted it.

The accounts do not line up. CTech said the offer described in that report was never actually made. TechCrunch's anonymous source said Datadog tried to buy Upwind but did not offer a premium above the $3.8 billion valuation. Neither company has confirmed any talks, and Upwind declined to comment to The Paypers.

What is clear is the outcome. Upwind took the new funding at about the price a buyer was reportedly willing to pay, and it kept control.

The numbers behind the price

Upwind's valuation has more than doubled in nine months. It raised $250 million at a $1.5 billion valuation in January 2026.

Item	Detail
New round	$400 million Series C
Valuation	$3.8 billion
Lead investor	Bessemer Venture Partners
Other investors	Greylock Partners, Craft Ventures
Previous round	$250 million at $1.5 billion, January 2026
Revenue growth	$20 million to $30 million of new ARR each quarter
Year-end target	About $90 million ARR

ARR is annual recurring revenue, the yearly value of a company's subscriptions. TechCrunch says Upwind adds $20 million to $30 million of it each quarter. It is projected to end the year near $90 million, so the new price is more than 40 times its forecast ARR.

CTech put Upwind's ARR above $50 million, up from about $20 million at the end of 2025. Earlier reports from CTech and The Paypers described a $300 million round at the same valuation. The final round came in $100 million larger than those reports.

That multiple is high, but not the highest in the sector. TechCrunch points to Cyera, another security startup, which it earlier reported was valued at 80 times ARR.

What this means for developers

For teams that buy or run cloud security tools, this round matters more than a typical funding headline.

• Upwind is not going anywhere soon. A $400 million round funds years of work. Teams evaluating it can worry less about the product being folded into a bigger platform next quarter.
• Consolidation is still likely. TechCrunch notes that few cybersecurity companies have gone public lately, so a future sale remains the most likely ending. Write data export and contract exit terms into any long deal.
• Security now follows AI agents. Upwind pitches monitoring for AI agents running in the cloud. If your team deploys agents that call tools or touch production data, ask every vendor how they detect misuse at runtime.
• Monitoring and security are merging. Datadog's reported interest shows that observability vendors want security features in the same dashboard. Teams paying for both kinds of tool should expect bundle offers and compare total costs carefully.
• Watch the pricing. Investors who pay 40 times revenue will want fast growth. That can mean aggressive sales pushes and price changes at renewal, so lock in multi-year rates where you can.

Upwind's bet is that staying independent is worth more than a quick exit. Its next few quarters of revenue will show if the investors who agreed are right about the market.