Upwind, a San Francisco-based cybersecurity startup specializing in artificial intelligence-powered cloud infrastructure protection, has successfully raised a massive $400 million Series C financing round. The investment values the four-year-old enterprise at an impressive $3.8 billion. The round was led by Bessemer Venture Partners, with additional participation from a roster of existing backers that includes Greylock Partners and Craft Ventures.
This latest influx of capital arrives just nine months after Upwind closed its previous financing event, a $250 million round that valued the startup at $1.5 billion. The rapid succession of funding rounds highlights both the explosive growth of the company and the intense market appetite for advanced cloud security solutions as organizations worldwide navigate an increasingly complex threat landscape driven by AI.
However, the path to finalizing this substantial Series C financing was not entirely straightforward. According to a person familiar with Upwind’s operations, the round had been in the works for months and nearly collapsed at a critical juncture due to an acquisition approach from Datadog. Datadog, a major publicly traded technology firm well-known for selling observability tools that monitor how software runs, sought to buy Upwind outright rather than let the venture capital investment proceed.
According to the same source, Datadog’s acquisition proposal did not offer a financial premium above the $3.8 billion valuation that had already been established by the venture capital investors. Weighing their options, Upwind’s leadership and stakeholders ultimately decided to decline the buyout offer and retain the company’s independence, allowing the venture-backed funding round to move forward. Representatives from TechCrunch have reached out to both Upwind and Datadog for official comment regarding the acquisition attempt.
Founded by veteran entrepreneur Amiram Shachar—who previously built and successfully sold the cloud spend management startup Spot.io to NetApp for $450 million—Upwind has experienced a meteoric rise over the past four years. The company’s core technology centers on what it calls "runtime" security. Unlike traditional preventative security measures that focus solely on static code or perimeter defenses, Upwind’s platform actively monitors, alerts, and remedies attacks and vulnerabilities within active cloud services in real time, offering a dynamic layer of protection that appeals heavily to enterprise customers.
This technological focus has translated into exceptional financial performance. Upwind has been consistently adding between $20 million and $30 million in annualized recurring revenue (ARR) each quarter. According to a person with direct knowledge of the company’s financials, Upwind is projected to close out the year at roughly $90 million in ARR.
Based on these figures, both the venture capital syndicate and Datadog valued the startup at more than 40 times its forecasted ARR, aligning with common financial benchmarks used to price high-growth software and cybersecurity companies. While a 40x multiple reflects immense market confidence, it is still notably lower than the staggering 80x ARR multiple fetched by Cyera, another exceptionally fast-growing cybersecurity startup, as highlighted in previous TechCrunch reporting from earlier this year.
The broader market context underscores why investors are willing to pay such high premiums for cybersecurity leaders. In a widely read blog post published recently, Tomasz Tunguz, a general partner at Theory Ventures, argued that cybersecurity is poised to become the third major wave of AI software that enterprise customers will willingly pay for, following closely behind the initial waves of AI-driven coding tools and customer support applications. As artificial intelligence automates and accelerates both defensive and offensive cyber tactics, companies are racing to secure their cloud infrastructures against sophisticated, machine-speed attacks.
By walking away from Datadog’s acquisition bid, Upwind’s leadership has signaled a strong internal belief that the startup will ultimately achieve a market valuation significantly higher than the $3.8 billion price tag on the table. Choosing to remain independent allows the company to continue scaling its operations, expanding its customer base, and capturing a larger share of the booming cloud security market without the constraints of an early corporate integration.
At the same time, market realities suggest that the story may not end with independence. Given the current macroeconomic and industry climate—characterized by a relative scarcity of cybersecurity companies successfully completing initial public offerings in recent years—an eventual acquisition remains a highly probable outcome for a startup of Upwind’s caliber and trajectory. According to sources familiar with the matter, Upwind continues to draw strong and steady acquisition interest from major industry players looking to bolster their security portfolios with advanced runtime capabilities.
As Upwind absorbs its latest $400 million war chest, the company is well-positioned to accelerate its product development, scale its go-to-market teams, and cement its status as a foundational pillar in the modern enterprise security stack. Whether it eventually charts a course toward the public markets or yields to future acquisition overtures at an even higher valuation, Upwind stands as one of the standout success stories in the current generation of enterprise software startups.
