The most talked-about acquisition story in Israeli cybersecurity this week may not be a story at all. According to The Information, US cloud monitoring company Datadog recently offered nearly $4 billion for Upwind, a cloud security company founded by Israeli entrepreneurs. According to Globes, Upwind turned the offer down.
Calcalist, however, reports a completely different version: according to CTech, the reported offer was never made. Neither company has commented officially, so at this stage it is unclear whether there was an offer and at what size. Datadog shares rose about 4.3% after the report.
A valuation that is almost there
What is known is that Upwind is finalizing a $300 million round at a valuation of about $3.8 billion, led by Bessemer Venture Partners, according to Bloomberg. That is almost 2.5 times the $1.5 billion valuation at which the company raised $250 million in a Series B last January. If Datadog's offer was indeed nearly $4 billion, it would have been only slightly above the round's valuation, which may explain why the founders would prefer to stay independent.
According to reports, the two companies already discussed a deal of about $1 billion last year, which did not happen.
Why it matters
Upwind develops a platform for securing cloud environments at runtime, a field in which large Israeli companies such as Wiz, acquired by Google, also operate. The interest of infrastructure companies like Datadog in cybersecurity companies reflects a broader trend: cloud and monitoring providers want to offer customers security too, and are looking for the fastest way there. For Israeli cyber, even a disputed report is a sign that demand for companies in the field is far from over.
