San Francisco-based Upwind, a cybersecurity startup focused on protecting cloud infrastructure with AI, has raised $400 million in Series C funding at a $3.8 billion valuation.

The round was led by Bessemer Venture Partners with participation from existing investors, including Greylock Partners and Craft Ventures.

The new funding comes nine months after Upwind raised $250 million at a $1.5 billion valuation. The latest round marks a significant increase in the company’s valuation as demand for AI-powered cybersecurity solutions continues to grow.

According to a person familiar with the company, Upwind’s funding round nearly fell apart after Datadog attempted to acquire the startup. Datadog, which provides software monitoring and observability tools, reportedly did not offer a valuation premium above the $3.8 billion figure set by investors. Upwind therefore chose to remain independent.

Founded by Amiram Shachar, Upwind focuses on what it calls runtime security. Its platform monitors applications and cloud services while they are running, helping security teams detect vulnerabilities and respond to active threats in real time.

The company has also reported rapid revenue growth. According to a person familiar with its financials, Upwind has been adding between $20 million and $30 million in annualized recurring revenue each quarter and is projected to reach approximately $90 million in ARR by the end of the year.

The funding demonstrates increased interest from investors in cybersecurity firms incorporating AI in maintaining safety of operations of the companies against evolving threats. The valuation of Upwind indicates that expectation of the increased demand for cloud security is valid due to the increase in the number of companies using AI and cloud solutions in their operations.

Even though Upwind rejected selling the company to Datadog, it is still attracting acquisition offers from the third parties. The company keeps developing independently with the help of its provides.