Upwind raises $400 million after rejecting Datadog acquisition offer — TechCrunch

San Francisco-based U.S. startup Upwind, which uses artificial intelligence to protect cloud infrastructure, has raised $400 million in a Series C round at a $3.8 billion valuation. The round was led by Bessemer Ventures, with previous investors Greylock Partners and Craft Ventures also participating, TechCrunch reports.

Acquisition attempt

According to a source familiar with the matter cited by the publication, preparations for the financing lasted several months and nearly fell through after Datadog attempted to acquire Upwind. Datadog is a public company that sells tools for monitoring software performance, known as observability.

According to TechCrunch's source, Datadog did not offer a premium above the $3.8 billion valuation set by venture investors. Upwind then decided to remain an independent company. At the same time, the startup continues to attract interest from potential buyers, the publication's source said.

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Upwind closed its previous $250 million round nine months earlier, when it was valued at $1.5 billion.

Revenue and security approach

According to the source, the four-year-old company adds between $20 million and $30 million in annual recurring revenue (ARR) every quarter and could finish the year with about $90 million. Thus, venture investors and Datadog valued Upwind at a multiple of more than 40 times projected ARR.

Upwind was founded by Amiram Shahar, who previously sold his cloud-services cost management startup Spot.io to NetApp for $450 million. The company calls its security approach runtime security: it involves detecting and eliminating attacks and vulnerabilities in active services in real time.