ISS-Corporate Solutions has acquired Celsia, a SaaS startup that develops corporate sustainability reporting software. Financial terms of the deal were not disclosed.
Celsia Business Background, Software, Funding History
Celsia, founded in 2021, is based in Oslo, Norway. The company's software helps customers to comply with the European Union's Corporate Sustainability Reporting Directive (CSRD) regulations. The software also supports EU Taxonomy and Sustainable Finance Disclosure Regulation (SFDR) reporting requirements. Roughly 300 companies leverage Celsia's software for sustainability reporting, the seller said.
Early Funding: Celsia raised EUR 2 million (roughly US$2.14 million) in a pre-seed 2022 funding round. Angel investors had funded an earlier round in 2021, though financial details for that round were not disclosed. We don't know if Celsia was seeking more funding before the sale to ISS-Corporate.
Petter Reistad, CEO and co-founder, Celsia
Target Partners: Celsia has a partner program for consulting firms and software developers. Top partners "get priority support and access to revenue-sharing models," though we don't know specific financial terms of the program.
About the Buyer: ISS Corporate Solutions, founded in 1997, has an extensive business footprint across North America, Europe and Asia. Key focus areas include designing and managing governance, compensation, sustainability, and cyber risk programs for customers. ISS-Corporate is a wholly owned subsidiary of Institutional Shareholder Services Inc. The overall business rolls up into ISS STOXX GmbH, which is majority owned by Deutsche Börse Group.
Amid the M&A deal, Celsia staff will remain in place and continue to report to Celsia’s CEO & Co-Founder, Petter Reistad. Headcount figures were not disclosed, but Celsia had 36 employees listed on LinkedIn as of April 2024.
In a prepared statement about the deal, Marija Kramer, head of ISS-Corporate, said: “As corporations across the globe seek cutting-edge solutions and services in response to a rapidly shifting regulatory landscape, ISS-Corporate is pleased to respond to those demands through this transaction. We welcome the Celsia team to the ISS-Corporate family and look forward to continue providing our clients with industry leading solutions spanning sustainability, governance, compensation, and cyber risk.”
Added Reistad: “We are excited for Celsia to join ISS-Corporate. Together we will help many more clients free up time to implement sustainability initiatives, while still doing high-quality reporting. Our clients are the true winners in this transaction. They will get access to a menu of complementary solutions, solving their full range of challenges within sustainability and regulatory reporting.”
ESG and Sustainability Software: Market Growth, Acquisitions
Annual sales of ESG reporting software will reach $4.34 billion in 2027, up from $905 million in 2021, according to Verdantix. That's a compound annual growth rate of 30%, the market researcher said.
Amid that anticipated growth, ESG software startups are racing to find funding and customers, while entrenched enterprise software companies are moving in with new products.
As a result, M&A activity in the sustainability reporting software market has been steady to strong -- though M&A valuations are rarely disclosed.
April 2023:Tango, backed by private equity firm Berkshire Partners, acquired WatchWire, a sustainability management software company that allows facilities and building management customers to track energy, water, waste, and carbon emissions data.
July 2023:EcoOnline, backed by private equity firm Apax Partners, acquired Ecometrica, which develops a sustainability software platform to help customers measure, report and monitor their greenhouse gas (GHG) emissions. Financial terms of the deal were not disclosed.
March 2023: Apexanalytix (also known as Apex), backed by private equity firms KKR and Carousel Capital, acquired ESG Enterprise, a provider of environmental, social and governance (ESG) management data, software and services. Financial terms of the deal were not disclosed.
We'll be watching for more M&A and funding activity in the sector.
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