Datadog in Advanced Talks to Acquire Israeli Cybersecurity Firm Upwind Security for Up to $1 Billion

Datadog, a US monitoring and analytics company, is in advanced talks to acquire Israeli cybersecurity firm Upwind Security for up to $1 billion. Upwind operates in the cloud applications security space and provides real-time threat protection for software systems. The deal is expected to be Datadog's largest acquisition in Israel to date.

Datadog, a prominent U.S.-based software company specializing in monitoring and analytics, is reportedly in advanced talks to acquire Israeli cybersecurity firm Upwind Security for up to $1 billion. The acquisition, if completed, would be Datadog's largest in Israel to date [1].

Upwind Security, founded in late 2022, has been making waves in the cloud applications security space with its innovative cloud security platform. The platform, often referred to as a CNAPP (Cloud-Native Application Protection Platform), provides real-time threat protection and risk prioritization for software systems. The company has raised a total of $180 million in funding, with a Series A round in December 2023 led by Craft Ventures and TCV, among others [1].

The acquisition comes at a time when Datadog's stock has been on a steady upward trajectory, driven by strong earnings reports and growing demand for cloud-based solutions. Datadog's recent earnings report showed a 65% year-over-year increase in revenue, with a 45% increase in the number of customers [2]. Despite recent competition from Chronosphere and OpenAI, Datadog remains well-positioned to continue growing in the observability market, with UBS maintaining a buy rating and raising its price target to $165 [4].

Upwind's cloud security platform consolidates various security functions into one comprehensive offering, making it a valuable asset for Datadog. The platform includes Cloud Security Posture Management (CSPM), Cloud Workload Protection (CWPP), Cloud Detection and Response (CDR), vulnerability management, identity security, and container security. By acquiring Upwind, Datadog can expand its capabilities and better serve its growing customer base [1].

The acquisition is expected to be a significant boost for Datadog's cloud security offerings, positioning the company to capture a larger share of the market. As more businesses shift their operations to the cloud, the demand for robust cloud security solutions is increasing, making Upwind's technology particularly attractive to Datadog.

References:
[1] https://www.calcalistech.com/ctechnews/article/1146p9qyl
[2] https://www.ainvest.com/news/datadog-trading-volume-drops-31-32-521-million-ranks-219th-day-gain-2507/
[4] https://www.ainvest.com/news/datadog-faces-competition-chronosphere-openai-partnership-2507/