Yelp to Acquire Hatch for $270M: What Managers Should Know
Yelp has agreed to acquire Hatch, an AI-powered lead management and communication platform, for $270 million in cash plus $30 million in employee retention over two to three years. The deal is expected to close in early February, pending customary approvals, after which Hatch will operate as a wholly owned subsidiary.
As of November 2025, Hatch reported $25 million in ARR, growing 70% year over year, with modestly negative cash flow. The platform helps businesses capture, route, and convert leads through automated messaging and centralized customer communications.
"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," said Jeremy Stoppelman, Yelp's co-founder and CEO. Chris Bache, Hatch's co-founder and CEO, said joining Yelp would help the company scale faster and help more businesses grow.
Why this matters for managers
- Lead conversion: Expect tighter response times, automated follow-ups, and fewer lost leads. This can reduce CAC and lift close rates without adding headcount.
- Tool consolidation: If you already advertise or manage profiles on Yelp, a native lead inbox and automation could replace a patchwork of chat, SMS, and scheduling tools.
- Operational visibility: Centralized messaging (text, web chat, possibly email) improves handoffs between sales, service, and support-and gives you cleaner funnel metrics.
Strategic angle
- SaaS expansion: Yelp moves deeper into subscription software for services businesses, adding recurring revenue to its ads and transactions mix.
- Distribution advantage: Yelp can bundle or upsell Hatch to its existing customer base, lowering adoption friction and speeding time-to-value.
- AI execution: Expect faster rollout of AI-assisted replies, qualification, and scheduling embedded where leads already start-on Yelp listings and requests.
What to watch post-close
- Pricing and packaging: Will Hatch be bundled with Yelp Ads or Premium Profiles, or remain a standalone SKU with seat/usage pricing?
- Integrations: CRM and scheduling hooks (Salesforce, HubSpot, ServiceTitan, Calendly, etc.). API access and data export matter for reporting and compliance.
- Data governance: How lead data flows between Yelp and Hatch, and admin controls for consent, retention, and audit trails.
- Category focus: Early integrations may prioritize high-intent services (home services, health, beauty, auto, restaurants with bookings).
Budget and KPI impact
Plan for a subscription plus potential usage-based fees tied to messaging volume. To justify spend, model ROI around three levers: faster first response, higher qualification rates, and tighter follow-up cadence.
- Baseline: Current response time, contact rate, set-rate (appointments), and close rate.
- Targets: Aim for minutes (not hours) to first response, 10-20% lift in contact-to-appointment, and measurable no-show reduction with automated reminders.
- Payback: Tie incremental closed revenue to software costs plus any staffing shifts (fewer manual callbacks, more handled chats per rep).
Action checklist
- Audit where leads leak: web forms, Yelp inquiries, missed calls, abandoned chats.
- Define routing rules: who gets which lead, SLA by category, escalation for high-intent requests.
- Pilot AI-assisted replies with clear scripts, compliant templates, and opt-outs baked in.
- Connect calendars and CRMs so every lead, message, and appointment is traceable end-to-end.
- Track weekly: speed-to-lead, contact rate, set-rate, show rate, and conversion to revenue.
- Update playbooks and coach your team; automation is only as good as the process it supports.
Further context
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