HubSpot shares fell as Alphabet halted acquisition talks, amid regulatory pushback on tech deals
HubSpot shares fell 12 percent on Wednesday after reports indicated Alphabet is not proceeding with plans to acquire the software company, according to CNBC.
Bloomberg noted that while Alphabet had discussions with HubSpot earlier this year, the talks did not advance to detailed due diligence, citing sources familiar with the matter.
Neither HubSpot nor Alphabet, the parent company of Google, immediately responded to requests for comment. Regulatory pushback in the US and abroad has recently hindered large technology company deals.
For example, Amazon abandoned its planned acquisition of iRobot, and Microsoft took 20 months to finalize its purchase of Activision Blizzard.
HubSpot creates software that helps small and medium-sized businesses automate marketing and reach prospective customers.
A potential acquisition of HubSpot would have bolstered Google's business software revenue, complementing its cloud infrastructure and other non-cloud businesses within Alphabet. Google’s cloud unit became profitable in 2023 following years of significant investment.
HubSpot has experienced rapid growth, with revenue increasing over 20 percent for the past six quarters and exceeding 30 percent prior to that. In the first quarter, HubSpot reported a 23 percent rise in sales to $617.4m.
Yamini Rangan, a former executive at Dropbox and Workday, has led HubSpot since 2021. She mentioned in March that the business climate is challenging, with customers demanding more proof of concepts before making purchase decisions.
Alphabet, on the other hand, has not achieved over 20 percent growth since early 2022. Its latest revenue rose 15 percent year-over-year to $80.54bn.
Google is under regulatory scrutiny, with the US Justice Department and state attorneys general accusing the company of anti-monopoly violations through exclusive agreements to make its search engine the default for consumers.
Despite Wednesday's decline, HubSpot retains a market cap of $25bn, making it twice the size of Google’s largest acquisition to date—the $12.5bn purchase of Motorola Mobility in 2011.
