HubSpot shares plunge 12% on report that Alphabet is shelving interest in acquiring software company

HubSpot
shares
plunged
12%
on
Wednesday
after
a
report
said


Alphabet
isn’t
going
forward
with
plans
to
buy
the
software
company.

According
to
Bloomberg,
Alphabet
was
in
talks
with
HubSpot
earlier
this
year,
“but
the
sides
didn’t
reach
a
point
of
detailed
discussions
about
due
diligence,”
the
report
said,
citing
people
with
knowledge
of
the
matter.

Representatives
for
HubSpot
and
Google
parent
Alphabet
didn’t
immediately
respond
to
requests
for
comment.

Regulators
in
the
U.S.
and
abroad
have
pushed
back
on
deals
that
large
technology
companies
have
proposed
recently.


Amazon
abandoned
its

planned
acquisition
of
robot
vacuum
maker


iRobot,
and
it
took
Microsoft
20
months
to

close
its
purchase
of
game
publisher
Activision
Blizzard.

HubSpot
develops
software
that
companies,
mostly
small
and
medium-sized
businesses,
use
to
automate
marketing
and
reach
prospective
customers.
Buying
HubSpot
would
have
helped
Google
grow
revenue
from
business
software,
alongside
cloud
infrastructure,
as
well
as
other
non-cloud
businesses
under
the
Alphabet
umbrella.

Google’s
cloud
unit

reached
profitability
in
2023
after
years
of
hefty
investment.

HubSpot
has
been
growing
more
rapidly
than
Google
of
late,
with
the
company
reporting
revenue
growth
above
20%
for
the
past
six
quarters
and
in
excess
of
30%
prior
to
that.
Sales
in
the
first
quarter
increased
23%
to
$617.4
million.

Former
Dropbox
and
Workday
executive
Yamini
Rangan
has
run
HubSpot
since
2021.
In
March,
she
pointed
to
a
challenging
business
climate,
where,
and
said
there
were
“more
proof
of
concepts
before
customers
got
ready
to
make
purchase
decisions.”

Alphabet
hasn’t
topped
20%
growth
since
early
2022.
Revenue
in
the

latest
period
rose
15%
from
a
year
earlier
to
$80.54
billion.

Google
is
already
facing
regulatory
scrutiny.
The
U.S.
Justice
Department
and
a
collection
of
state
attorneys
general
accused
Google
of
violating
anti-monopoly
law
through
exclusive
agreements
with
phone
makers
and
browser
companies
to
make
its
search
engine
the
default
for
consumers.

Even
after
Wednesday’s
drop,
HubSpot
has
a
market
cap
of
$25
billion,
making
it
twice
the
size
of
Google’s
largest
deal,
which
was
the
$12.5
billion
Motorola
Mobility
acquisition
in
2011.

Read
Bloomberg’s
full
report
here.

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