GitLab Explores Sale, Sparks Bidding War Among Tech Giants
Reports indicate that GitLab is in discussions with investment bankers regarding a potential sale, attracting interest from industry peers like Datadog. However, reaching a definitive agreement may take several weeks. Notably, Alphabet, Google’s parent company, is a major shareholder in GitLab, holding 22.2% of voting shares through its venture capital arm. Therefore, any sale of GitLab would require Google’s approval.
After Microsoft acquired GitHub, the world’s largest code-hosting platform, GitLab emerged as a formidable competitor. Concerns over Microsoft’s control led some enterprises to choose GitLab for their software development processes.
GitLab offers a unified data store, user interface, and permission model for the entire DevOps lifecycle, enabling teams to significantly reduce cycle time through enhanced collaboration and focus. The company went public on the Nasdaq in October 2021, with its share price peaking at $123. Currently, the stock is trading at $50, valuing the company at approximately $8 billion.
The question arises as to why Google wouldn’t acquire GitLab themselves, especially considering Alphabet’s recent $23 billion acquisition of cloud cybersecurity firm Wiz. Acquiring GitLab would seemingly be a lucrative opportunity for Google.
GitLab boasts 30 million registered users globally, with over half of the Fortune 100 companies as customers. However, it only recently achieved profitability after years of losses. During earnings calls, GitLab acknowledged facing pricing pressure in its competition with Microsoft’s GitHub, a key factor impacting its revenue.
Source: Reuters
