Most four-year-old startups would take a buyout offer near $4 billion. Upwind turned one down and raised $400 million instead.
The San Francisco cloud security company announced a Series C on Wednesday at a $3.8 billion valuation. Bessemer Venture Partners led the round, and existing investors Greylock and Craft Ventures took part. Nine months ago, Upwind raised $250 million at a $1.5 billion valuation.
TechCrunch reports that the round almost didn't happen. Datadog, the public company that sells software monitoring tools, tried to buy Upwind while the raise was underway. According to a person familiar with the company, Datadog didn't offer anything above the $3.8 billion venture valuation, so Upwind decided to stay independent. One caveat: reports differ on the size of the offer. The Information said Datadog offered close to $4 billion, while Israeli outlet Calcalist questioned whether Datadog made any $4 billion offer.
Upwind's product is "runtime" security. It watches cloud services while they run and flags or fixes attacks and weak spots in real time, using built-in AI agents to investigate alerts. The company is reportedly adding $20 million to $30 million in annual recurring revenue each quarter and expects to end the year near $90 million. That puts its valuation at more than 40 times forecast revenue. That's high, but it's about half the 80x multiple rival Cyera reportedly got earlier this year.
Founder Amiram Shachar has sold a company before. He sold Spot.io to NetApp for $450 million. Very few cybersecurity companies have gone public lately, so an eventual acquisition still looks like the most likely exit, and other buyers reportedly remain interested. For now, Upwind is betting it will be worth more later.
