Is GitLab up for grabs? Google-backed developer platform explores sale
Google-backed software developer, GitLab, is reportedly considering a sale after receiving acquisition interest. The US provider of cloud-based software development tools has an estimated market value of around $8 billion. Among the interested parties is cloud monitoring firm Datadog. Alphabet, Google's parent company and a significant investor in GitLab with a 22.2% voting stake through its venture capital arm, is yet to comment on the developments.
Tech sector sees surge in mergers and acquisitions
The technology sector has witnessed a surge in dealmaking, driven by advancements in artificial intelligence and cloud computing. In the first half of 2024 alone, tech accounted for the largest share of global mergers and acquisitions with a year-on-year increase of over 42% to $327.2 billion. Alphabet is currently busy in advanced talks to acquire cybersecurity startup Wiz for an estimated $23 billion.
GitLab's platform and performance in the market
GitLab's platform enables development, operations, and security teams to build and manage software using a single tool. The company has over 30 million registered users and is used by more than half of the Fortune 100 companies. Despite being headquartered in San Francisco, all GitLab employees work remotely. Since its initial public offering in 2021, GitLab's shares have been trading in New York but have underperformed this year with a decrease of 16%.
GitLab's financial performance
Despite reporting a robust year-on-year revenue growth of 33% to $169.2 million and posting its first ever positive cash flow in the latest quarter, GitLab faces pricing challenges due to competition from Microsoft following its acquisition of rival GitHub in 2018. In other news, GitLab CEO and co-founder Sid Sijbrandij, who controls 45.51% of the voting stock through dual-class shares, recently announced that he would undergo treatment for osteosarcoma, a form of cancer, for the second time.
