Datadog fell 14% on no news of its own. Upwind just priced its theme at 40 times revenue

The round that priced cloud security at 40 times revenue

On October 28 Upwind, a two-year-old San Francisco startup that secures cloud workloads while they run, closed a $400 million Series C↗ at a $3.8 billion valuation led by Bessemer Venture Partners, nine months after a $250 million round at $1.5 billion and taking total capital raised past $800 million ¹. Founder Amiram Shachar sold Spot.io, a cloud cost management company, to NetApp▼−8.87% — NetApp, down 8.87 percent today for about $450 million in 2020 and started Upwind two years later ¹.

The same theme now carries a second price tag, and it belongs to the public market. Datadog▼−11.27% — Datadog, down 11.27 percent today, which sells the software engineering teams use to monitor and secure cloud infrastructure, tried to buy Upwind and would not offer a premium above the $3.8 billion venture price, TechCrunch reported, citing a person familiar with Upwind; Upwind raised instead ¹². The Israeli outlet CTech reported on October 22 that no offer was made, and neither company confirms the talks ¹².

Two prices for one theme

The complication is arithmetic. Upwind is projected to end 2026 at roughly $90 million of annualized recurring revenue, so the round prices it above 40 times revenue; a peer, CyeraPVT~$3B — Cyera, private, latest valuation ~$3B, reportedly cleared about 80 times earlier this year ¹. Datadog, profitable with about 80% gross margins, trades near 21 times trailing sales↗ ³, even as its own filings show revenue growth accelerating to 35.6% year over year in the June quarter ⁴. The venture market pays two to four times what the stock market pays for the same dollar of cloud security revenue.

Estimates held, the multiple fell

Datadog closed at $235.27 on October 30, down 11.50% on the day and 14.1% for the month↗, on Amazon's▼−1.20% — Amazon, down 1.20 percent today and Intel's▼−29.36% — Intel, down 29.36 percent today results, not any Datadog announcement, as the Nasdaq logged its worst session since June ²³. The forward price/earnings multiple fell from about 103 times to about 89 times while the next-12-month EPS estimate held at $2.65 and consensus revenue edged up ². The wider selloff was a repricing of the trade: Alphabet fell 13% on a revenue and profit miss, and Amazon double-missed↗ despite AWS growing 40% ⁵.

Chief Technology Officer Alexis Le-Quoc sold 43,224 shares on October 28↗ at an average near $278.90, under a 10b5-1 plan dated June 2025, so scheduled, but at a price the market no longer quotes ⁶.

The bear case is real

Datadog's growth is usage-driven and roughly 90% of revenue comes from large accounts, so a genuine pullback in cloud and AI spending would slow it at any margin; at 21 times trailing sales the stock is not cheap ³. As AInvest put it, Friday sold the speed, not the company, and the print decides whether this was an overcorrection or the start of a lower multiple ³.

The door opens November 4

Datadog reports before the open on November 4, on guidance of $1.135 billion to $1.145 billion against consensus near $1.15 billion, with remaining performance obligations modeled at about $3.55 billion versus $2.79 billion a year earlier; watch the 2027 EPS estimate, now about $2.98 ²³.

History cuts both ways. Seven years ago Cisco proposed buying Datadog for $7 billion as it prepared to go public↗; Datadog chose the market, and its valuation has risen more than 13-fold since its first day of trading ⁷. Shachar told ISMG in January that whoever builds the best cloud security platform is a $100 billion company ⁷. Upwind is betting on that path with venture money at 40 times revenue ⁷. On November 4, the public market answers for its side of the ledger ⁷.