GitLab, a software company supported by Google, is considering a sale

People with knowledge of the matter claim that GitLab, a US supplier of cloud-based software development tools, is thinking about going public after attracting attention from investors, including Alphabet, Google's parent company.

The sources claim that GitLab, which is now valued at about $8 billion, is working alongside investment bankers on the sale process that has attracted interest from rivals including cloud monitoring provider Datadog. The sources said that no agreement was yet reached and that a resolution is still weeks away. They asked to remain anonymous since the material is confidential.

GitLab and Datadog did not swiftly respond to requests for comments. Alphabet, which controls a 22.2% voting stake in GitLab through its venture capital arm, was contacted but did not respond to a request for comment. Developments in cloud computing and artificial intelligence are enabling technology companies to expand their product lines, which is propelling dealmaking within the sector. According to reports, Alphabet is in the early stages of talks to pay roughly $23 billion to acquire cybersecurity startup Wiz. The company had previously considered making an acquisition bid for marketing tool provider HubSpot. Dealogic statistics show that in the first half of 2024, the technology sector accounted for the largest share of mergers and acquisitions, growing by more than 42% year over year to reach $327.2 billion globally.

Development, operations, and security teams can create and manage software with a single tool thanks to GitLab's platform. Over half of Fortune 100 companies use the service, which has over 30 million registered users. Even though everyone works remotely, the company's formal headquarters are located in San Francisco. GitLab's shares have decreased 16% this year due to worries about client expenditure, though the S&P 500 Application Software index increased by 3%.

Despite impressive revenue growth and positive cash flow, GitLab acknowledged the challenge of pricing its products due to competition with Microsoft, who acquired GitHub for $7.5 billion in 2018. CEO Sid Sijbrandij announced his need for further treatment for osteosarcoma, a type of cancer, after receiving therapy last year. Despite this, Sijbrandij remains committed to his responsibilities and is working towards a full recovery.