Yelp Acquires Hatch in $300M Deal to Expand AI-Driven Lead Management

Yelp has agreed to acquire Hatch, an AI-powered lead management platform, in a deal valued at up to $300 million as it accelerates its push into automation for local services.

The transaction includes $270 million in cash and a further $30 million earmarked for employee retention over the next two to three years, and is expected to close in February 2026.

Founded in 2018, New York-based Hatch develops AI agents that respond to customer enquiries, qualify leads and book appointments for service businesses such as plumbers, contractors and other home services providers.

The company employs around 150 people and generates $25 million in annual recurring revenue, which Yelp says has been growing at around 70% year on year.

Yelp plans to operate Hatch as a standalone business while also offering its services to professionals listed on its platform. The acquisition values Hatch at roughly 12 times annual recurring revenue, a multiple that reflects strong growth but is more restrained than some recent AI-focused deals. Yelp said the move would help diversify its revenue base beyond advertising by adding subscription income tied to operational tools.

The deal builds on Yelp’s broader strategy to integrate AI into its products. The company launched its own AI agents last year to handle calls on behalf of restaurants and service providers, and sees lead automation as a natural extension of that effort.

Yelp CEO and founder Jeremy StoppelmanDealroom has a profile for this one. Try Dealroom → described the opportunity as one that has gained momentum since the wider adoption of generative AI, with Hatch emerging early in the space.

Sources:
Yelp
Hatch
PPC Land
The Information
PYMNTS
Pulse 2.0

J.V.