M&A: Gevo Acquires CultivateAI; Pitches Carbon Accounting Software for Agriculture

Gevo has acquired Cultivate Agricultural Intelligence (CultivateAI) to further focus on carbon accounting software and data in the agriculture market. Gevo paid $6 million in cash, with additional earn-out payments potentially possible, the buyer said.

CultivateAI will generate about $1.7 million in revenue and positive cash flow in 2024, the M&A announcement said.

The deal reinforces steady M&A activity in the carbon accounting software market, where dozens of startups are striving to compete against entrenched ERP (enterprise resource planning) software companies for ESG (environmental, social and governance) application capabilities.

This is M&A deal number 264 that Sustainable Tech Partner has covered so far in 2024. Related: See all M&A deals involving sustainability, climate tech and green IT services listed here.

Gevo Acquires CultivateAI: Business Backgrounds

CultivateAI will tuck into Verity, a Gevo subsidiary that offers carbon accounting and tracking solutions. The result: Farmers will gain the "highest quality data-driven solutions for carbon abatement in food, feed, fuels, and industrial markets" while also helping to "improve their operations, sustainability, and profitability," the companies said.

Gevo, founded in 2005, is based in Englewood, Colorado. The company's mission is to "transform renewable energy into low carbon transportation fuels." The Verity business unit helps customers to "track, verify, and empirically value carbon intensity across the full carbon lifecycle," the company asserts.

CultivateAI, founded in 2020, is based in Orlando, Florida. The company's Precision Ag software helps customers to "make informed, data-driven decisions with real-time analytics." Early partners include John Deere and Wingtra. CultivateAI has eight employees listed on LinkedIn as of September 2024.

M&A: Gevo, Verity Executive Perspectives

In a prepared statement about the deal, Paul Bloom, head of Verity and chief carbon officer of Gevo, said: "Adding CultivateAI and its inventive approach to Verity will help us grow revenue by providing the most complete set of data-driven analytics services to farmers, agronomists, and researchers. With this acquisition, Verity is speeding up our development and increasing the value we will deliver to our customers.”

Added CEO Pat Gruber, CEO of Gevo: “We are constantly looking for this kind of development that delivers new streams of untapped revenue to the company. As we accelerate development of Verity, we expect to see these customer relationships and revenue opportunities grow as customers seek out new products and services that help them understand their businesses better. These new business elements support our mission of growing an efficient circular economy, and delivering shareholder returns by adding scalable revenue opportunities now.”

CultivateAI officials were not quoted in the M&A announcement.

M&A Activity: ESG and Sustainability Software

Meanwhile, M&A activity in the ESG and sustainability software markets has been steady to strong. Among the noteworthy deals in 2024:

• Asuene, a carbon accounting software provider, acquired CoRocket and launched an associated business called Asuene Veritas. Financial terms of the deal were not disclosed.
• Workiva acquired carbon accounting software startup Sustain.Life for $100 million, and the acquired software has been rebranded as Workiva Carbon.
• EQT Private Equity acquired Avetta, a developer of supply chain risk management software. Avetta's SaaS platform has enabled clients to "manage supply chain risks across health, safety, and sustainability," EQT said.

Next up, private equity firm Thoma Bravo may be seeking to sell ESG software provider Cority for roughly $2 billion, Reuters reported.