Yelp Inc. announced today that it will buy Hatch, an artificial intelligence-powered lead management and communication platform provider, for up to $300 million.

Under the terms of the deal, Yelp will initially pay $270 million in cash to acquire Hatch, plus up to $30 million more in employee retention payments subject to employees sticking around over two to three years.

Founded in 2018, Hatch offers an AI-powered lead management and customer communication platform that helps service-oriented businesses connect with potential customers more effectively. The company’s platform centralizes communication across text, email, voice and other channels to make it easier for teams to engage leads and retain customers.

Hatch uses AI to automate and accelerate responses to incoming leads so businesses can engage prospective customers within seconds. The platform integrates with lead sources such as web forms and lead generators to ensure that no opportunity is missed and to help businesses get more appointments and drive higher returns on their marketing spend.

The platform supports automated follow-ups across the customer journey to help businesses check in on estimates, answer questions and nurture relationships without placing more burden on human staff.

For more hands-off support, Hatch offers AI-driven communication agents that can handle inbound and outbound interactions over voice, SMS and email, answering inquiries, booking appointments, screening spam calls and also rescheduling services.

As of November, Hatch had $25 million in annual recurring revenue, representing a year-over-year annual recurring revenue growth rate of 70% at what is described as a “modestly negative cash flow.”

The acquisition will bring together Yelp’s scale and brand with Hatch’s lead management solutions to better position both companies to serve the evolving needs of service businesses as they embrace AI for growth.

“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 chief executive officer. “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.”

Coming into its acquisition, Hatch, formally Hatchify Inc., had raised around $13.7 million in venture capital funding, according to data from PitchBook. Investors in the company included Differential Ventures, Character Technologies Inc. and Tiferes Ventures.

The acquisition is expected to close in early February, subject to customary closing conditions.

Image: Hatch