Raises $400M

Most startups jump at a $3.8 billion buyout. Upwind chose to stay independent. The AI-driven cloud security company has raised a $400 million Series C round at that same valuation after passing on an acquisition offer from Datadog, according to TechCrunch. Quick Facts Why Upwind Said No to Datadog TechCrunch reports, citing a person familiar with Upwind, that Datadog tried to acquire the company. Datadog is a public company that sells software for monitoring how applications run. According to that source, Datadog’s offer carried no premium over the $3.8 billion valuation that venture investors had already set, so Upwind decided to keep going on its own. Datadog and Upwind haven’t commented publicly. TechCrunch says it reached out to both. A Fast Climb in Valuation The new round arrives just nine months after Upwind raised $250 million at a $1.5 billion valuation, which means the company’s valuation has more than doubled in under a year. The funding had been in the works for months and nearly collapsed after the Datadog approach. The Numbers Behind the Hype Upwind is four years old and growing quickly. A person familiar with the company’s financials told TechCrunch it adds $20 million to $30 million in annualized recurring revenue (ARR) every quarter and is projected to end the year near $90 million. That puts the valuation above 40 times forecast ARR, a common yardstick for software companies. It’s still well below the roughly 80 times ARR that investors assigned to cybersecurity startup Cyera earlier this year, according to TechCrunch’s earlier reporting. What Upwind Actually Does Upwind builds what it calls “runtime” security for cloud systems. That means it detects, alerts on and fixes attacks and vulnerabilities in services that are actively running, in real time, rather than only scanning code or configurations beforehand. The company uses AI to do this as threats grow more sophisticated. The Founder’s Track Record Founder Amiram Shachar has done this before. He previously sold his cloud cost management startup, Spot.io, to NetApp for $450 million. Is Cybersecurity the Next AI Wave? TechCrunch points to an argument from Theory Ventures general partner Tomasz Tunguz, who has written that cybersecurity could be the third big wave of AI software companies pay for, after coding tools and customer support. Upwind’s valuation jump reflects investor appetite for that thesis. What Comes Next Turning down a deal signals confidence that the company will be worth more later. But TechCrunch notes that few cybersecurity companies have gone public in recent years, so an eventual sale remains the most likely outcome. According to the same source, Upwind is still attracting acquisition interest. What to Watch Next Source: TechCrunch