Upwind raises $400M at a $3.8B valuation after turning down Datadog
Bessemer led the Series C, which more than doubles Upwind's valuation in nine months. The runtime cloud security startup walked away from a Datadog offer to stay independent.
Cloud security startup Upwind has raised a $400 million Series C at a $3.8 billion valuation, led by Bessemer Venture Partners, after choosing to stay independent rather than sell to Datadog.
The round, announced on Wednesday, lands nine months after Upwind's $250 million Series B at a $1.5 billion valuation, which Bessemer also led. That is more than a doubling of the company's price in under a year. Chief executive Amiram Shachar wrote in a company blog post that the new money takes Upwind's total funding past $800 million.
Canapi Ventures joins as a new investor. Every existing backer took part, according to the company, including Cyberstarts, Greylock Partners, Craft Ventures, Leaders Fund, Salesforce Ventures, TCV, Alta Park Capital, Penny Jar Capital, Cerca Partners, Swish Ventures and Picture Capital.
The Datadog offer
The fundraise nearly didn't happen. TechCrunch reported, citing a person familiar with the company, that Datadog, the listed maker of software monitoring tools, tried to buy Upwind while the round was in the works but did not offer a premium over the $3.8 billion venture price, so Upwind walked away. A week earlier, Israeli business daily Globes, citing The Information, reported the offer at about $4 billion. TechCrunch said it had asked both companies for comment.
It is the second time the two have circled each other. In July 2025, Datadog was reported to be in advanced talks to buy Upwind for around $1 billion, a deal that never closed.
The numbers behind the decision are steep. According to TechCrunch's source, Upwind has been adding $20 million to $30 million in annualized recurring revenue each quarter and is on track to finish 2026 at roughly $90 million. At $3.8 billion, that puts the valuation above 40 times forecast revenue. The company itself says only that revenue has quadrupled this year.
What runtime security means
Upwind sells what the industry calls a cloud-native application protection platform, or CNAPP. Many tools in that category scan cloud accounts and code periodically and flag misconfigurations and known vulnerabilities. Upwind's pitch is to start inside running systems instead. As Bessemer described it at the Series B, lightweight sensors inside workloads stream network, process and container events, and a correlation engine maps them into a live graph of what is actually executing. That lets the platform tell whether a given vulnerability is reachable in a specific container or service, which cuts down the long lists of alerts that security teams otherwise have to triage.
The Series C pitch leans hard on AI. In the release, Upwind says its platform now covers APIs and AI agents running inside customer environments alongside cloud workloads. In his post, Shachar describes three in-house agents: a Blue agent that investigates logs to reconstruct an attack, a Red agent that safely tests whether an exposure can actually be exploited, and a Green agent aimed at fixing findings at scale. He also says the company is building sensors for endpoints and scanners for AI agents and their skills, and has set up an AI research lab focused on agentic security and model benchmarks.
Upwind supports AWS, Microsoft Azure, Google Cloud and Oracle Cloud, and is sold through AWS Security Hub with billing through AWS. The company lists Siemens, Roku, Carvana, Nubank, Supabase and ClickUp among its customers.
A crowded, consolidating market
Upwind was founded in 2022 by Shachar, Liran Polak, Tal Zur and Lavi Ferdman, the team that earlier built Spot.io and sold it to NetApp for $450 million in 2020. Wiz, one of the best-known names in cloud security, is now part of Google, which completed its $32 billion acquisition in March.
Investors have kept funding the category. Earlier Venture Block coverage tracked rounds such as Chainguard's $356 million raise in software supply-chain security and Native's $42 million launch in multi-cloud security management. Few security companies have gone public in recent years, and TechCrunch noted that a sale remains the most likely eventual outcome for Upwind, which, according to its source, is still drawing acquisition interest.
For now, Upwind says the money will go to product development and go-to-market expansion, with Shachar naming identity, data and AI as the next areas the platform will cover.
