Google Negotiating to Buy Enterprise Cloud Software Company D2iQ

Google reportedly is in negotiations to buy enterprise cloud software company D2iQ.
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Google is in negotiations to buy enterprise cloud software company D2iQ, a report said Monday, but the sale may not happen.

San Francisco-based D2iQ, formerly known as Mesosphere, is expected to be valued more than the $250 million the company has raised from venture capitalists, but less than the $775 million valuation it received via its Series D round in 2018, Axios reported, citing someone close to the situation.

The deal isn't yet done and may not happen as at least one D2iQ executive is said to oppose the transaction.

Investors include Khosla Ventures, Andreessen Horowitz, Koch Disruptive Technologies and T. Rowe Price.

D2iQ recently laid off 34 employees, or 13% of its workforce, although this was not related to the acquisition talks.

Google originally developed Kubernetes, the open source server-management technology that D2iQ has integrated into its software offerings. Acquiring D2iQ could help Google better compete with  (AMZN) - Get Report and Microsoft  (MSFT) - Get Report when marketing cloud offerings to developers.

Neither D2iQ and Google immediately responded to requests for comment. 

In addition to its headquarters in San Francisco, D2iQ has offices in London, Hamburg and Beijing.

Earlier this month, D2iQ said it was awarded a U.S. Department of Defense Enterprise Software Initiative contract for the company's DevSecOps solutions and services.

Under the agreement, D2iQ will provide the Defense Department with access to its suite of enterprise-grade open source solutions for deploying cloud native applications in Day 2 operations, a feature that is used later in the life-cycle of the managed object.

Shares of Google parent Alphabet  (GOOGL) - Get Report were off slightly to $1,273.78.