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Upwind reportedly rejects Datadog's offer because it only matched what its VCs said it was worth

Datadog reportedly offered no premium over the price Upwind's own venture backers had just set. So the backers invested at it instead.

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Why it matters: Upwind reportedly stayed independent because Datadog did not offer a premium over the valuation its venture investors set, suggesting that recent VC prices can act as a floor in sale talks.

For information only, not investment advice. Prices delayed.

Tickers: DDOG

Upwind, a four-year-old cloud security startup, has reportedly turned down roughly $3.8 billion from Datadog ($DDOG) on the grounds that it was roughly $3.8 billion. According to TechCrunch, citing a person familiar with Upwind, Datadog attempted to buy the company. “It didn’t offer a premium above the $3.8 billion valuation set by venture capital investors, the person said, so Upwind decided to stay independent.” TechCrunch said it had reached out to both companies for comment.

Those venture investors, led by Bessemer, then handed Upwind $400 million at that same $3.8 billion, the company announced. The price was set by the people paying it, matched by Datadog, and rejected for being exactly the price.

“We simply couldn’t accept an offer that agreed with us,” said a term sheet that asked not to be named because it is a PDF. A Datadog dashboard, reached for comment, displayed a flat line labeled “premium.”

TechCrunch's source says Upwind is projected to end the year at roughly $90 million in annualized recurring revenue, which values it at more than 40 times that forecast. Upwind's own release says revenue quadrupled in 2026, though, as Decrypt noted, it gives no dollar figures. Quadrupling is a lot of something.

CEO Amiram Shachar was humble about it in his post: “It is a big day for us, becoming the fastest growing company in modern cloud & AI security. But, it is still a small milestone in our journey.” He also reported total funding of over $800M, and a plan: “We are not even 1% done.”

TechCrunch adds that a sale remains the most likely outcome for the startup, and that it continues to draw acquisition interest. Bidders are advised that the asking price is whatever they offer, plus a premium on top.

Sources

  1. Upwind raises $400M after walking away from Datadog acquisition offer, TechCrunch
  2. The Next Wave Is Here: Upwind's $400M Series C to Build The Cloud & AI Security Platform, Upwind (blog post by CEO Amiram Shachar)
  3. Upwind Closes $400 Million Series C at $3.8 Billion Valuation as Revenue Quadruples in 2026, Upwind Security (press release via FinanzWire)
  4. AI Security Startup Upwind Raises $400M at $3.8B Valuation, Decrypt

Tags: funding-round · valuation · venture-capital · mergers-acquisitions