Datadog in talks to acquire Israeli cybersecurity firm Upwind for $1B.

Datadog is reportedly in talks to acquire Israeli cybersecurity firm Upwind for approximately $1 billion. The news comes after Upwind announced a funding round in December. Datadog is a software company that provides cloud-based infrastructure and application performance monitoring, while Upwind specializes in cybersecurity services. The acquisition, if finalized, would expand Datadog's offerings in the cybersecurity space.

Datadog, a leading U.S.-based software company specializing in cloud-based infrastructure and application performance monitoring, is reportedly in advanced talks to acquire Israeli cybersecurity firm Upwind Security for up to $1 billion [1]. The acquisition, if completed, would significantly expand Datadog's capabilities in the cybersecurity space.

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/