M&A: Sphera Acquires Supply Chain Sustainability Software Company SupplyShift

Sphera, backed by Blackstone's private equity arm, has acquired supply chain sustainability software company SupplyShift. Among the key results: Sphera's customers and partners should gain deeper Scope 3 supply chain visibility capabilities. Financial terms of the deal were not disclosed.

This is M&A deal number 14 that Sustainable Tech Partner has covered so far in 2024. See all M&A deals involving sustainability, climate tech and green IT services listed here.

Sphera Acquires SupplyShift: Business Focus and Software Offerings

SupplyShift, founded in 2012, is based in Santa Cruz, California. The company has 63 employees listed on LinkedIn as of January 9, 2024. SupplyShift's software allows users to gain visibility into their supply chains. Those users, in turn, can engage suppliers for ESG (environmental, social and governance) data to mitigate risks and drive improved performance, the company says. SupplyShift's partner program spans data and network partners, service providers, and referral partners.

SupplyShift was backed by multiple venture capital firms and early stage investors. Key funding rounds arrived in November 2018 and December 2021. Valuation details for those rounds were not disclosed.

Sphera, founded in 2016, is based in Chicago, Illinois. The company's roots extend back roughly 33 years. Sphera develops ESG performance and risk management software. The company also offers data and consulting services focusing on Environment, Health, Safety & Sustainability (EHS&S), Operational Risk Management (ORM), Product Stewardship and Supply Chain Risk Management (SCRM). The firm has 1,476 employees listed on LinkedIn, and the company services 7,000 customers.

Private equity firm Blackstone acquired Sphera for $1.4 billion in 2021.

Despite some political ESG debates in the United States, worldwide demand for ESG-related software appears to be strong. Among the anecdotal evidence: Sales of carbon accounting software will reach $65.06 billion by 2030, up from $12.5 billion in 2023 -- generating a compound annual growth rate (CAGR) of 22.9% from 2023, according to SNS Insider.

ESG Software and Supply Chain Sustainability M&A: Executive Perspectives

In a prepared statement about the deal, Sphera CEO Paul Marushka said: "SupplyShift has seen tremendous growth with its software solution that allows for direct communication with suppliers and customers and enables the seamless collection of their Scope 3 emissions data, which helps suppliers improve their supply chain ESG performance. As more regulations are passed that demand transparency, the SupplyShift solution will become indispensable in meeting global regulatory requirements and stakeholder expectations. Bringing SupplyShift's portal into the Sphera family will expand our current offerings and enable us to provide unparalleled Scope 3 and ESG tracking and reporting capabilities. We are pleased to welcome SupplyShift's customers, colleagues and solution to Sphera and look forward to helping our combined customer base accurately track and report their Scope 3 emissions and be compliant."

Added Alex Gershenson, SupplyShift's CEO and founder: "SupplyShift was founded on the idea of leveraging software to drive sustainability initiatives, and for 11 years we have been empowering companies to understand their supply chain ESG risk and performance. We are excited to join the Sphera family and take data availability to a new level through the combination of Sphera's industry-leading ESG data and SupplyShift's Scope 3 data collection abilities. Through SpheraCloud, Sphera's SaaS platform, and its LCA solutions, we can help even more customers track their Scope 3 emissions and manage their supply chain sustainability."

Concluded Blackstone's Eli Nagler and Kelly Wannop in a joint statement: "We are excited to welcome SupplyShift to Sphera and continue investing in this company's innovative solutions. This planned acquisition supports our commitment to Sphera's accelerated growth and will bolster the company's supply chain capabilities for its customers moving forward."

2024 Sphera Customer Summit

So what's next? Keep an eye on the Sphera 2024 Customer Summit, which is scheduled for April 29-May 1 in Austin, Texas. We'll be watching to see if or how Sphera positions SupplyShift's software within the larger Sphera portfolio of offerings.