M&AOct 23, 2026, 10:19 UTC

Datadog made near-$4B offer for cloud security startup Upwind, reports say

What's the deal? Datadog has offered to buy Israeli cloud cybersecurity startup Upwind for nearly $4 billion, according to The Information. Upwind has not accepted, and is instead finalising a $300 million funding round at a roughly $3.8 billion valuation.

Who's who? Datadog, which carries a $90 billion market capitalisation, sells data observability software that helps companies collect and monitor data across applications. Upwind, founded in 2022 by chief executive officer Amiram Shachar, sells software to track cloud-hosted applications — including AI agents — and detect potential breaches in real time.

Why it fits: Datadog already sells security software, so Upwind's real-time capabilities could slot alongside its monitoring platform. The two reportedly discussed a roughly $1 billion deal last year that fell through; Upwind has since grown fast, with annual recurring revenue topping $50 million, up from about $20 million at the end of 2025.

Why now? New AI models have shown they can find serious flaws in widely used software, pushing companies to spend more on security. More businesses are also deploying AI agents that connect to cloud applications, fuelling demand for tools like Upwind's. Customers include Roku and Brazilian neobank Nubank.

The caveat: The reported offer carries little premium over Upwind's private valuation, and the startup's funding round suggests it may prefer to stay independent. Upwind and Datadog did not comment, and Ctech reported the offer was not made.

The signal: Private cybersecurity firms are drawing white-hot interest as buyers race to build security platforms for the AI era. Proofpoint agreed this month to buy Varonis for $6.3 billion, and Google closed its $32 billion purchase of Wiz earlier this year. A deal near $4 billion would value Upwind at about 80 times its recurring revenue — a higher multiple than Google paid for Wiz.