GitLab (GTLB.O), a U.S. provider of cloud-based software development tools backed by Google parent Alphabet (GOOGL.O), is exploring a sale after attracting acquisition interest, according to sources. With a market value of about $8 billion, GitLab is working with investment bankers, drawing interest from companies like cloud monitoring firm Datadog (DDOG.O). Although any deal is weeks away and not certain, the exploration signals a significant move in the tech sector, which saw $327.2 billion in mergers and acquisitions in the first half of 2024.
GitLab, with over 30 million registered users and deployment by more than half of the Fortune 100 companies, offers a platform for development, operations, and security teams. Despite reporting robust revenue growth and its first-ever positive cash flow, GitLab’s shares are down 16% this year. Concerns include customer spending cuts and competition with Microsoft (MSFT.O) following its acquisition of GitHub.
GitLab CEO Sid Sijbrandij, who controls 45.51% of the voting stock, recently announced he would undergo treatment for osteosarcoma again. Despite this, he remains committed to his duties and a full recovery. Datadog, valued at $44 billion, provides software for cloud collaboration and productivity measurement. The potential sale highlights the ongoing consolidation in the tech industry driven by advances in AI and cloud computing.