Datadog Offered $4 Billion to Buy Cloud Security Startup ‘Upwind’
Aaron Holmes and Valida Pau report that Datadog (about $90B market cap) recently offered nearly $4B for Israeli cloud security startup Upwind Security, per someone with direct knowledge of the talks. Upwind has had takeover approaches from several bidders in recent months and accepted none; it is finalising a $300M round at about $3.8B (per two people), so the bid carries little premium. Datadog tried to buy Upwind last year for about $1B (per one person) before talks fizzled. Upwind's ARR is now above $50M (about $4M a month), up from roughly $20M at the end of 2025 (per one person), so $4B is about 80x ARR, richer than Google's $32B Wiz deal. Founded in 2022 by CEO Amiram Shachar, Upwind monitors cloud apps including AI agents and auto-responds to hacks (customers include Roku and Nubank); it has raised over $400M, including $250M in January at $1.5B, from Bessemer, Craft Ventures, Cyberstarts, Salesforce Ventures and Greylock. Caveats: Upwind had no comment, Datadog did not immediately respond, the ARR figure rests on one person, and Globes and Bloomberg had earlier reported the round.
Why it matters
Hard, fresh company data for Dealroom: a pending $300M round at about $3.8B, a nearly $4B strategic bid, ARR growth from about $20M to above $50M in 2026, and a failed ~$1B approach in 2025. It also shows how extreme cloud-security multiples have become (about 80x ARR), which is useful for Israeli ecosystem coverage and cyber M&A tracking.
Executive takeaways
- Valuation step-up: $1.5B in January 2026 ($250M round) to about $3.8B on a $300M round now, with a nearly $4B Datadog bid on the table.
- Growth: ARR from roughly $20M at end-2025 to above $50M (about $4M a month), per one person.
- Multiple: about 80x ARR, above the multiple of Google's $32B Wiz deal.
- Repeat buyer interest: Datadog offered about $1B last year; multiple bidders approached in recent months, none accepted.
- Strategic logic: Datadog already sells security; Upwind adds real-time cloud and AI-agent runtime protection, an area where Palo Alto Networks, Google and CrowdStrike have each bought rivals.
- Demand driver: AI-found flaws (such as the PHP bug) and AI agents connecting to cloud apps are pushing security budgets up.
What The Information may be missing
No names for the other bidders, and no sign of whether Upwind is leaning toward the round or a sale, or what price it would accept. The lead investor of the $300M round isn't named. The ARR figure comes from a single source and there is no detail on burn, margins or headcount. No comment from either company, and no view on whether Datadog shareholders would back an 80x ARR deal.
