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I would guess its a down-round type of acquisition at the urging of Gatsby's investors and founders. They raised 10M+, this allows their investors and founders to get some liquidity back and Netlify picks it up on the cheap.

Yeah I've seen this for a bunch of startups that weren't profitable and struggled to close a new funding round. They pay back the VCs, the employees get zeroed out, and the execs usually get a retention bonus in the 6 figure range.

It's typical "buy and shut down competition"...

How exactly does Netlify shut down competition with this?

As some people mentioned elsewhere, the acquisition is probably more focused on Gatsby Cloud than Gatsby itself (which remains open source), and Gatsby Cloud is a Netlify competitor.

> Gatsby Cloud is a Netlify competitor

That's a bold assumption. What's Gatsby Cloud's market share? Zero-point-something percent?

Yes, companies make moves to increase revenues.