According to sources familiar with the subject, GitLab (GTLB.O), opens new tab, a U.S. supplier of cloud-based software development tools whose investors include Alphabet, the parent company of Google (GOOGL.O), is considering a sale after generating purchase interest.
According to the sources, GitLab, which is valued at about $8 billion on the market, is collaborating with investment bankers on a sale process that has sparked interest from competitors, such as cloud monitoring company Datadog (DDOG.O), opens new tab.
The sources, who asked to remain anonymous since the information is private, stated that no agreement has been reached and that any settlement is still weeks away.
Requests for comments were not promptly answered by Datadog or GitLab. A request for comment from Alphabet, which through its venture capital arm holds a 22.2% voting share in GitLab, was not answered.
Technology businesses are expanding their products due to developments in cloud computing and artificial intelligence, which is driving dealmaking in the industry. Alphabet is reportedly in early discussions to buy cybersecurity startup Wiz for about $23 billion, having previously looked into an offer to buy HubSpot (HUBS.N), opens new tab. This information was revealed by Reuters.
Based on statistics from Dealogic, the technology sector increased more than 42% year over year to reach $327.2 billion globally in the first half of 2024, accounting for the highest proportion of mergers and acquisitions.
Development, operations, and security teams can build and maintain software with a single tool thanks to GitLab’s platform. According to its website, it has over 30 million registered users and is used by over half of the Fortune 100 organizations. Although all of its workers are remote, the company’s official headquarters are in San Francisco.
Due to worries that its clients are cutting back on spending, GitLab’s shares, which have been trading in New York since its initial public offering in 2021, have dropped 16% so far this year, lagging a 3% increase in the S&P 500 Application Software index.
