Israeli cybersecurity startup Upwind has attracted acquisition attention after The Information reported that US software company Datadog offered nearly $4 billion to purchase the business. According to the October 22 report, Upwind has not accepted the proposal and is finalizing a $300 million funding round at a valuation of approximately $3.8 billion. However, separate reporting has disputed whether the acquisition offer was made, and neither company has publicly confirmed the proposed transaction.
The Reported Acquisition Approach
The Information attributed the acquisition approach to a person with direct knowledge of the discussions, describing a price slightly above Upwind’s reported fundraising valuation. The publication also reported that Upwind had received interest from other potential buyers without agreeing to an acquisition. The reports have raised questions about whether the cloud security company will continue growing independently or eventually consider a strategic sale.
The reported approach follows earlier speculation linking Upwind and Datadog to a potential transaction worth approximately $1 billion in 2025. Those discussions did not lead to an announced acquisition, and Upwind continued expanding its business and attracting investors. The renewed interest comes as major technology companies seek stronger security capabilities for increasingly complex cloud infrastructure.
A Substantial Increase in Valuation
Upwind’s reported $300 million financing would place its valuation near $3.8 billion, more than double the figure associated with its previous major round. In January 2026, the startup announced a $250 million Series B led by Bessemer Venture Partners at a valuation of approximately $1.5 billion. That round brought its total disclosed investment to more than $430 million and established Upwind as a unicorn.
Bessemer Venture Partners and TCV have been identified among the leading backers of the latest financing, with existing investors also reportedly participating. The fundraising was reported in September, although its final closing details have not been independently confirmed through a company announcement. If completed on the reported terms, the investment would strengthen Upwind’s capacity to expand its security platform and international operations.
Building Cloud and AI Security Capabilities
Founded in 2022, Upwind is led by co-founder and CEO Amiram Shachar, alongside co-founders Tal Zur and Lavi Ferdman. Its platform uses real-time information from cloud workloads to identify vulnerabilities, detect suspicious behavior, and help organizations respond to potential attacks. This approach distinguishes urgent security exposures from lower-priority findings that may not pose an immediate threat.
The startup has expanded its focus as enterprises deploy more artificial intelligence applications and autonomous agents within cloud environments. In September 2026, Upwind announced its acquisition of security startup Aegis and the launch of the Upwind AI Lab to investigate emerging threats. These initiatives reflect demand for security tools that monitor applications and AI-powered systems during operation.
Strategic Implications for Datadog and Upwind
Datadog supplies observability software that helps businesses monitor applications, infrastructure, and operational data across their technology systems. Acquiring a company specializing in runtime cloud security could broaden those capabilities, although any strategic rationale remains hypothetical without a confirmed transaction. A purchase price close to Upwind’s proposed private valuation would also provide shareholders with a limited premium over the reported fundraising benchmark.
The rise of AI-driven applications has made cloud infrastructure harder to secure, increasing demand for systems that detect potential breaches as they unfold. For software providers and investors, the overlap between operational monitoring and security creates opportunities to develop broader enterprise platforms. Upwind’s reported financing and acquisition interest illustrate that convergence, even as the details of the alleged offer remain contested.
The Information’s report has placed Upwind at the center of a potential multibillion-dollar acquisition, but the reported Datadog proposal remains disputed and unconfirmed. The startup’s substantial increase in reported valuation and its continued expansion into cloud and AI security nevertheless underscore its growing market position. Whether Upwind remains independent or eventually explores a sale, its financing and strategic decisions will attract attention across the cybersecurity sector.
source: The Information