Enterprise Weekly #514: M&A Heats Up, Developer Happy Hour, and more
Work-Bench is an enterprise software VC firm leading Seed rounds. If you are or know anyone thinking about founding an enterprise software startup — we’d love to meet! Please reach out to chat. 📩
This week saw major M&A moves from AI-native applications to core infrastructure.
OpenAI Acquires Windsurf for $3B
OpenAI finalized its largest acquisition to date with the $3B purchase of Windsurf, the AI-native IDE that’s become a breakout in the coding assistant space. The deal signals OpenAI’s intent to move up the stack from supplying foundational models to owning more of the application layer and to better compete with incumbents like GitHub Copilot.
An interesting aside is Windsurf’s origin story. The company began life as a GPU virtualization platform, aiming to help teams optimize compute allocation and reduce hardware costs. That infrastructure DNA never went away and is likely one of the reasons Windsurf has been able to offer a compelling free tier as low cost, efficient compute is baked into their core.
Databricks Bets on OLTP with Neon for $1B
Meanwhile, Databricks is reportedly acquiring Neon, the serverless Postgres startup, for $1B. Neon is best known for disaggregating storage and compute at the OLTP layer a similar innovation to what Snowflake brought to OLAP. If the deal closes, Databricks would be positioned across nearly the entire data value chain: transactional + analytical databases, data streaming and replication, and AI (via its MosaicML acquisition).
Datadog Expands Into Experimentation with Eppo
Datadog announced the acquisition of Eppo, an experimentation platform that helps teams manage feature flags and drive product insights. It’s a natural extension of Datadog’s push into product analytics following their recent Metaplane acquisition (data observability). The acquisition signals a broader ambition to serve multiple personas across the enterprise, from DevOps to product to data teams.
While the IPO window is closed for now, acquisitions are giving founders, operators, and investors some much needed liquidity 💰
But the takeaway for founders raising rounds is much more nuanced. As Jamin Ball writes:
There will continue to be (I believe) appetite for deals in the $1B - $5B range, but above that the frequency of deals will drop off dramatically. There simply isn’t as many buyers who can pay those kind of prices. So why is it important for startups to keep this in mind? When raising rounds at multi-billion dollar valuations, there are implicit “bets” you are making as part of that. You don’t want to “shut out” the exit path of a $1-$5b acquisition if you’re not certain you can make it past that. In the public markets, there are very few companies trading >10x revenue. So the bar to being a >$5b public company is >$500m in revenue. If you’re at $20m of ARR today and offered a round at $2B, it’s important to remember the bets you’re making! VCs get to place a number of bets (sometimes option betting…). For founders and employees, they get to make one bet.
🔥 On the infra side, incidents aren’t just inevitable — they’re increasingly complex. In today’s always-on world, engineering teams are under pressure to respond faster, align cross-functionally, and learn from every outage. But most still rely on duct-taped tools and tribal knowledge.
Join Robert Ross, co-founder & CEO of our portfolio company FireHydrant for a high impact webinar on how modern teams are transforming incident response. He’ll share how FireHydrant’s all-in-one platform is helping companies cut mitigation time by up to 90% — and finally bring order to the chaos.
🧨 In the same vein, our portfolio company Prequel just open-sourced two powerful tools — “cre”, a standard for sharing known reliability issues, and “preq”, a lightweight detector that brings community-curated problem detection to everyone. If you’re an SRE and are tired of reinventing the wheel every time something breaks, definitely check out Prequel’s open-sourced tools — they make it easy to detect known issues before they turn into incidents.
Lastly, with summer upon us, come join our 5th Annual Work-Bench Developer Happy Hour! 🍻
Back by popular demand, we're excited to host this rooftop event and bring together our amazing technical community across NYC’s top enterprise tech companies to catch up and connect! Sign up here.
📚 Read more (th)reads:
🎙️ Jessica Lin: Marketing is Just a Math Problem with the Former CMO at Datadog
✍️ Priyanka Somrah: Computational Requirements for Multi-Agent Systems
Renee Shah: 10 Startup Ideas Across Infra, Databases, and Security
Nikhil Krishnan: Defensibility in AI Applications (Healthcare)
Company: Socure
Role: Head of Product Management, AML
Technology: Risk OS for FSI
Funding: $646M from Work-Bench, Scale Venture Partners, Accel, Bain Capital Ventures, Tiger Global, and more
🌟 Company of the Week 🌟
Marveri raises $3.5M led by Bessemer Venture Partners, Day One Ventures, and Others
Future of Work • Seed • Cambridge, MA
Co-Founders: Connor Acle (CEO), Emily Mu (CTO)
Operand raises $3.1M led by Felicis
Future of Work • Seed • San Francisco, CA
Tesseral raises $3.3M led by YC
Infrastructure / Dev Tools • Seed • San Francisco, CA
Paramark raises $6M led by Greylock
Sales / Marketing • Seed • San Francisco, CA
Agree raises $7.2M led by Pelion Venture Partners
Future of Work • Seed • San Francisco, CA
Row Zero raises $10M led by IA Ventures
Data / AI / Machine Learning • Seed • Seattle, WA
Duna raises $12.1M led by Index Ventures
Data / AI / Machine Learning • Seed • Amsterdam, The Netherlands
RightRev raises $13M led by Cheyenne Ventures and Innovius Capital
Future of Work • Series A • Roseville, CA
Jericho Security raises $15M led by The Era Fund LP
Risk / Security • Series A • New York, NY
Onebeat raises $15M led by Schooner Capital
Future of Work • Venture • Tel Aviv, Israel
StackAI raises $16M led by Lobby VC, LifeX Ventures and Others
Data / AI / Machine Learning • Series A • San Francisco, CA
Fastino raises $17.5M led by Khosla Ventures
Data / AI / Machine Learning • Seed • San Francisco, CA
StackOne raises $20M led by GV
Data / AI / Machine Learning • Series A • London, UK
Unblocked raises $20M led by B Capital and Radical Ventures
Infrastructure / Dev Tools • Series A • San Francisco, CA
WisdomAI raises $23M led by Coatue
Data / AI / Machine Learning • Seed • San Mateo, CA
Relevance AI raises $24M led by Bessemer Venture Partners
Collaboration / Productivity • Series B • Surry Hills, Australia
OX Security raises $60M led by DTCP
Risk / Security • Series B • New York, NY
Orca AI raises $72.5M led by Brighton Park Capital
Future of Work • Series B • London, UK
Statsig raises $100M led by Iconiq Growth
Infrastructure / Dev Tools • Series C • Bellevue, WA
Parloa raises $120M led by Durable Capital Partners, Altimeter Capital, and General Catalyst
Sales / Marketing • Series C • New York, NY
Anysphere raises $900M led by Thrive Capital
Infrastructure / Dev Tools • Venture • San Francisco, CA
OpenAI acquires Windsurf for $3B
Infrastructure / Dev Tools • Acquisition • Mountain View, CA
Riverwood Capital acquires Quicklizard for an Undisclosed Amount
Future of Work • Acquisition • Tel Aviv, Israel
ServiceNow acquires Data.World for an Undisclosed Amount
Data / AI / Machine Learning • Acquisition • Austin, TX