Upwind raises $400M at $3.8B valuation, rejecting Datadog's buyout bid
What's the deal? Upwind, a San Francisco- and Israel-based cloud and AI security startup, has raised $400 million in a Series C round led by Bessemer Venture Partners at a $3.8 billion valuation. New backer Canapi Ventures joined existing investors including Greylock Partners, Cyberstarts, Craft Ventures, Salesforce Ventures, TCV, and Alta Park.
Why now? The round lands less than nine months after Upwind's $250 million Series B, which valued it at $1.5 billion in January 2026. It brings total funding to more than $800 million since the company was founded in 2022.
What's the endgame? Founded by serial entrepreneur Amiram Shachar — who sold his first company, Spot.io, to NetApp for $450 million in 2020 — Upwind monitors cloud workloads, APIs, and AI agents in real time rather than through periodic scans. It will use the funding to accelerate product development and expand go-to-market operations, including AI agents that investigate threats and remediate risks.
By the numbers: Upwind says revenue quadrupled in 2026. Its annual recurring revenue rose from about $20 million at the end of 2025 to more than $50 million, according to The Information. Customers include Siemens, Roku, Carvana, Nubank, and ClickUp.
What could go wrong? Upwind rejected a roughly $4 billion acquisition offer from Datadog, betting its value will climb further. That offer sat only slightly above the new round's valuation, meaning private investors paid nearly what a strategic buyer would have — a wager on sustained growth in a crowded market.
The sector is crowded: Google completed its $32 billion acquisition of Wiz, while Palo Alto Networks and CrowdStrike also compete. Dell'Oro expects the market to reach $12.9 billion by 2030, growing nearly 30% a year from 2025.
The signal: Upwind's raise ranks among the largest Series C rounds ever for an Israeli security company, reflecting investor conviction in cloud and AI security. US cyber startups drew $4.6 billion through May 2026, with 72% of deals involving AI-enabled companies, according to J.P. Morgan — a shift toward larger cheques for startups with enterprise traction.
Read more: thenextweb.com, Reuters, Tech Funding News
Image credit: Generated with Gemini
