Yelp announced it has agreed to acquire Hatch, an AI-powered lead management and customer communication platform, in a deal aimed at accelerating Yelp’s AI transformation and broadening its SaaS tools for services businesses. Under the terms of the agreement, Yelp will pay approximately $270 million in cash and fund an additional $30 million in employee retention payments expected to be paid over two to three years.
The transaction is expected to close in early February, subject to customary closing conditions. Once completed, Hatch will operate as a wholly owned subsidiary of Yelp.
Yelp positioned the deal as a strategic move to help local service providers handle the growing complexity of converting and managing inbound demand. The company said bringing Hatch’s platform into Yelp’s ecosystem will combine Yelp’s consumer reach and brand with software designed to help businesses respond faster, communicate more consistently, and improve conversion and retention with lower overhead.
Hatch’s core product focuses on lead management and communications, using AI to help service businesses manage customer interactions at scale. The platform is designed to support personalized conversations while reducing operational burden—an increasingly common pain point for small and midsize service providers that need to respond quickly to inquiries while juggling scheduling, staffing, and day-to-day operations.
Yelp said Hatch’s capabilities fit its broader push to embed AI across its products and workflows for local businesses. The company has been expanding tools that help businesses not only get discovered but also convert demand into booked jobs and repeat customers, particularly in home services and other appointment- and quote-driven categories.
Financially, Yelp highlighted Hatch’s revenue profile and growth trajectory. As of November 2025, Hatch had achieved about $25 million in annual recurring revenue, based on recurring subscription amounts billed in November (net of refunds and uncollectable amounts) multiplied by 12. Yelp said Hatch’s ARR was growing about 70% year over year and that the business was operating at a modestly negative cash flow level.
The acquisition reflects a continuing shift among consumer marketplace platforms toward software and workflow products that deepen relationships with business customers and generate recurring revenue streams. For Yelp, adding a lead-management and communications layer could strengthen the value proposition for service providers by helping them respond and close more efficiently, while also potentially improving the consumer experience through quicker replies and smoother follow-through after discovery.
Yelp cautioned that the announcement includes forward-looking statements and that actual results could differ based on factors such as the ability to close the transaction and successfully integrate Hatch’s business and technology. The company pointed to risk disclosures in its filings, including its most recent annual and quarterly reports.
KEY QUOTES:
“The acquisition of Hatch is an important step forward in Yelp’s AI transformation, accelerating our strategy to bring powerful new AI tools to local businesses. Hatch is solving challenging lead management and communication pain points for services businesses, and we’ve been impressed by the innovative AI technology and traction they’ve built. I believe that by bringing our companies together we will be able to help service providers operate and grow more efficiently.”
Jeremy Stoppelman, Co-Founder And Chief Executive Officer, Yelp
“This is an incredible moment for Hatch. We’ve worked day in and day out to build something that truly helps our customers grow their businesses. I’m grateful to the Hatch team for all their work and dedication that brought us to this milestone. Joining Yelp means we can scale faster and help more businesses grow and succeed. The journey has only just begun, and I couldn’t be more excited about what we’ll accomplish together.”
Chris Bache, Co-Founder And Chief Executive Officer, Hatch
