HashiCorp reportedly considering sale amid growing challenges

HashiCorp is the subject of furious industry talk which indicates the company is contemplating a sale amid an increasingly challenging marketplace.

Loquacious individuals “with knowledge of the matter” told publication Bloomberg that upper management at the software biz are evaluating all the available options.

In a statement sent to The Register, HashiCorp told us it doesn’t comment on “speculation/rumors, as they are just that,” yet we note that the investment world has become a more ruthless place over the last year or so, particularly for companies where AI doesn’t have an obvious application.

Others, including Twilio, have been pressured by activist investors, resulting in reorganizations and the departure of its CEO. HashiCorp has also seen one of its co-founders exit and the business come under scrutiny both before and after its controversial licensing change.

HashiCorp’s adoption of the Business Source License (BSL) was greeted with dismay by many in the open source community and effectively pulled the company’s flagship Terraform project from the FOSS world.

Following the change, users could – in theory – look at the source code for Terraform. However, using the code for production purposes was a prohibited unless a special commercial license was purchased.

“Source available is not open source,” Chris Aniszczyk, CTO of the Cloud Native Computing Foundation, told The Register in September.

One upshot was that the Terraform infrastructure management project was forked, and OpenTofu (a rebrand of OpenTF) was born.

The Register spoke to HashiCorp’s CEO, David McJannet, at the company’s HashiConf shindig last year. While the prospect of a sale was not mentioned, McJannet did suggest that a license move similar to the one the company made was becoming increasingly inevitable for other orgs as well.

He told us: “I don’t know what else the alternative is for a lot of these startups.”

The transition from a stratospheric valuation to something that has to start paying its way is tricky. A sale may return value to investors, and HashiCorp’s technology will be attractive to suitors seeking management tools for their clouds.

HashiCorp’s share price peaked at the end of December 2021 at $91.04 and at the time of writing is $28.80. The market capitalization is $5.2 billion. ®


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