GitLab, the cloud-based software development platform backed by Google parent Alphabet, is exploring a potential sale following acquisition interest, Reuters reports. With a market value of approximately $8 billion, GitLab is currently working with investment bankers to assess its options. The company has attracted attention from peers, including cloud monitoring firm Datadog.
According to sources familiar with the situation, the sale process is in its early stages, and no agreement is imminent. GitLab and Datadog have yet to respond to requests for comment. Alphabet, which holds a 22.2% voting stake in GitLab through its venture capital arm, also did not comment.
The technology sector has seen a surge in dealmaking, driven by advancements in artificial intelligence and cloud computing. Alphabet is reportedly in advanced negotiations to acquire cybersecurity startup Wiz for around $23 billion and has previously considered acquiring marketing software company HubSpot.
Data from Dealogic indicates that technology mergers and acquisitions reached $327.2 billion globally in the first half of 2024, marking a 42% increase from the previous year.
GitLab's platform integrates development, operations, and security teams into a single tool and is used by over half of the Fortune 100 companies. Despite its robust year-on-year revenue growth of 33% to $169.2 million and its first positive cash flow, GitLab's shares have fallen 16% this year. The decline contrasts with a 3% increase in the S&P 500 Application Software index, attributed to concerns over customer spending and competition with Microsoft, which acquired GitHub for $7.5 billion in 2018.
GitLab CEO and co-founder Sid Sijbrandij, who holds 45.51% of the voting stock through dual-class shares, announced he will undergo treatment for osteosarcoma, a type of cancer, for the second time. Despite his health challenges, Sijbrandij remains committed to his role and to GitLab's operations.
Datadog, valued at $44 billion, provides cloud-based software that enhances collaboration and productivity measurement for technology workers.
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