Datadog reportedly offered nearly $4B for Israel's Upwind, which is raising at $3.8B instead

What's the deal? Datadog offered to buy Israeli cloud security startup Upwind for nearly $4 billion, The Information reported on 22 October. Globes, citing that report, said Upwind turned the offer down. Israeli outlet Ctech said it had learned that no such offer was made. Neither company has commented publicly, so the bid remains unconfirmed.

What's not in dispute: Upwind is finalising a $300 million round at a $3.8 billion valuation, first reported in September with TCV and Bessemer Venture Partners leading. That is more than double the $1.5 billion valuation of its $250 million round in January 2026. The Information reports that Upwind's annual recurring revenue has passed $50 million, up from about $20 million at the end of 2025.

Who's who? Upwind was founded in 2022 by CEO Amiram Shachar, CTO Tal Zur and Lavi Ferdman. It monitors applications and AI agents running in the cloud and detects and responds to attacks in real time; customers include Roku and Brazilian digital bank Nubank. Datadog, the Nasdaq-listed observability company, has been expanding into security. The two companies reportedly discussed a deal worth about $1 billion last year that did not happen.

The catch: A price of nearly $4 billion would sit barely above Upwind's new private valuation, which helps explain why a fast-growing startup with fresh funding would say no.

The signal: Israel's cloud-security scene keeps producing multi-billion-dollar targets after Google's $32 billion deal for Wiz. In September Upwind bought AI-security startup Aegis in a stock deal and launched Upwind AI Labs, betting that companies running AI agents in the cloud need new kinds of protection.

Sources: The Information, Ctech, Globes

Photo: Upwind CEO Amiram Shachar (Upwind, via Globes)