Israeli Cyber Firm Upwind Raises $400 Million After Rejecting DataDog Acquisition Offer
Translated & summarized from Globes by baba
Israeli cybersecurity firm Upwind has raised $400 million at a $3.8 billion valuation, rejecting a purchase offer from DataDog. The funding round was led by Bessemer Venture Partners, with significant participation from existing and new investors. Upwind cited a fourfold revenue increase and the growing demand for AI-focused security solutions as reasons for its growth and decision to remain independent. DataDog, a major player in observability, is also developing AI security products and has a development center in Israel.
The story in 5 lines · by baba
- Upwind raised $400 million at a $3.8 billion valuation, rejecting a DataDog acquisition offer.
- Bessemer Venture Partners led the funding round, joined by numerous other venture capital firms.
- The company reported a fourfold increase in revenue, driven by demand for AI and cloud security.
- CEO Amiram Shahar highlighted AI's impact on cloud infrastructure and cyber threats.
- DataDog, a competitor, is developing its own AI security product and has an Israeli presence.
Israeli cybersecurity startup Upwind, founded by serial entrepreneur Amiram Shahar, has officially withdrawn from acquisition talks with software company DataDog and has instead secured $400 million in funding at a $3.8 billion valuation. DataDog had been pursuing Upwind for several months, reportedly offering a sum close to its current valuation. However, Upwind's investors and founders believed the company was on a strong growth trajectory, justifying the decision to raise capital instead of being acquired.
The funding round was led by existing investor Bessemer Venture Partners, with representation in Israel by partners Adam Fisher and Amit Karp. New investors joining the round include Canapi Ventures, alongside existing backers like Lightspeed Venture Partners, Kraft Ventures, Greylock Partners, Altair Capital, Salesforce Ventures, and Israeli funds Cyberstarts, Pitango Capital, and StageOne Ventures. Notably, venture capital funds associated with NBA stars Steph Curry (Penny Jar Capital) and Omri Casspi (Swish), who were early investors, also participated.
Upwind reported a fourfold increase in revenue since the beginning of the year, driven by demand for security platforms designed for complex cloud environments and AI processing, particularly in the post-Wiz acquisition era. The company's revenue is estimated to be around $20 million, projecting an annual run rate of $80 million or more. This latest funding round follows a previous one in January that valued the company at $1.5 billion.
CEO and founder Amiram Shahar stated that AI is fundamentally altering cloud infrastructure architecture, the scope of cyber threats, and software development. He emphasized the need for security teams to understand the real-time interplay between cloud and AI to identify critical vulnerabilities, proactively fix risks, and detect cyberattacks. Upwind's platform aims to redefine cybersecurity by integrating cloud workload context, APIs, and real-time intelligence to provide security, development, and DevOps teams with a unified understanding of exploitable risks and exposures.
DataDog, a Nasdaq-listed company with a market cap of $100 billion, specializes in monitoring software systems, cloud infrastructure, and AI, a field known as Observability. The company is developing a competing product, AI Guard, to protect enterprise AI agents and sought to acquire Upwind to bolster its AI capabilities. DataDog maintains a development center in Israel and may increase its hiring there to strengthen its product development if Upwind's rejection leads to a strategic shift.
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