Google acquiring HubSpot, is the rumor true?

Smart move if so. HubSpot has been incredibly scrappy – may not be the most scalable, best in class but wow have they been impressive over the years. User interface is second to none.

Their financials are stellar, too. Jason M. Lemkin just summarized this.

  1. New customers are still growing 23% a year, even at 200,000+ Customers and $2.4 Billion in ARR.
  2. Revenue Growth is Up Just 24%. NRR Likely Down to Around 100% (but everyone in SaaS is facing headwinds, they are no different).
  3. ACV Basically Flat at $11,365 (note they just repriced their product)
  4. Rocketed to Almost 20% Non-GAAP Operating Profit – doubling in last yr. Living the mantra we are kinda tired of hearing – “efficient growth”
  5. $310,000 in Revenue Per Employee which is solid for SaaS

This is the same trajectory Eloqua->Oracle, Marketo->Adobe went.

Could this bring HubSpot more into the Enterprise?

4 additional thoughts on combining HubSpot with Google in polling industry peers:

1️⃣ Combo could enable powerful personalization and AI integration in ads by combining HubSpot’s first-party data with Google AdWords…but might be perceived as “creepy”. (And then there is the cookie deprecation).

2️⃣ On the flip side, combining a content/ad distribution platform like Google with a CRM platform like HubSpot could raise ethical concerns around data use and tracking – yet could also provide customer benefits, 𝐞𝐬𝐩𝐞𝐜𝐢𝐚𝐥𝐥𝐲 𝐰𝐢𝐭𝐡 𝐝𝐞𝐦𝐢𝐬𝐞 𝐨𝐟 𝐜𝐨𝐨𝐤𝐢𝐞𝐬.

(Imagine a world with a universal ID on the platforms Google would own that gets around EMEA privacy issues!)

3️⃣ HubSpot tends to focus more on the SMB market while Salesforce dominates large enterprises. This combo helps Google compete with Microsoft’s Dynamics 365 and Azure.

4️⃣ Google has little track record with large enterprise software acquisitions, creating uncertainty around how well they will execute the HubSpot integration. Could HubSpot could get “lost” inside Google? It’s such a large revenue business, I can’t imagine this happening.What do you make of this combination?