M&A: MSP, Consulting Firm WAP Acquires Sustainability Software Company Atmos AI

WAP Sustainability Consulting has acquired Atmos AI. The deal blends an established MSP and sustainability consultancy with an ESG and carbon accounting software startup. Financial terms of the deal were not disclosed.

This is M&A deal number 99 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.

This is WAP's third acquisition in the past two years. Earlier acquisitions involved buying Coldstream Consulting and TriSight Engineering.

MSP Acquires Sustainability Software: Business Backgrounds

WAP Sustainability, founded in 2009, is based in Chattanooga, Tennessee. The MSP and consulting firm assists customers with carbon accounting, life cycle assessment and standards development for sustainability programs. WAP appeared on the Inc. 5000 list of America's fastest-growing companies in 2022 and 2023. The company has 61 employees listed on LinkedIn as of February 2024.

Atmos AI, founded in 2021, is based in Nashville, Tennessee. The company develops ESG (environmental, social and governance) software to help customers manage and report their ESG data. We don't know what type of AI engine the company leverages.

Demand for such software appears strong. Indeed, the global ESG reporting software market will reach $2.55 billion in 2028, up from $980 million in 2023, according to The Business Research Company. That's a 21% compound annual growth rate (CAGR), the market research firm said. Still, competition will be intense since dozens of technology giants and venture capital-backed startups now offer ESG software programs.

Atmos AI raised $1.7 million in seed funding in early 2022 from GoAhead Ventures, New Climate Ventures, 701 Fund, and WAP Sustainability. We don't know Atmos AI's seed funding valuation or exit valuation.

Atmos AI Co-Founders Adam Jace & Max Mona developed the business concept while pursuing their Masters in Finance at Vanderbilt University, the company said in 2022. Their early focus involved assisting private equity, venture capital, and private venture-backed corporations with ESG compliance & regulatory standards efforts. Jace exited in December 2023 to join US Digital Partners. Mona now shifts to product team lead to spearhead Atmos AI's integration into WAP Sustainability.

WAP Sustainability Consulting Acquires Atmos AI: Executive Perspectives

In a prepared statement about the acquisition, WAP CEO William Paddock said: "At WAP Sustainability, we are committed to empowering organizations to achieve their sustainability goals through innovative and effective ESG strategies. The integration of Atmos AI's technology into our core ESG services will revolutionize how our customers approach ESG reporting, making it as straightforward as using a platform like TurboTax."

Added Atmos AI Co-Founder Max Mona: "This collaboration is a significant opportunity for us to expand the reach of our product to thousands of companies on their ESG reporting journey. The unique combination of expert-level service from WAP Sustainability combined with our platform's user-friendly interface and advanced AI capabilities, will make ESG reporting accessible to more companies than ever before."

Noted Jonathan Ursillo, sustainability manager and WAP’s lead product specialist: “The acquisition of Atmos AI by WAP Sustainability not only expands our toolkit but also deepens our commitment to making sustainability approachable for all companies.”

Concluded Wade Fletcher, founding engineer and CTO of Atmos AI: "Combining WAP Sustainability’s expert guidance with our self-service, AI-powered technology enables a new hybrid paradigm that will accelerate the evolution of ESG reporting.”

We'll be watching to see how WAP manages the Atmos AI integration and scaling strategy thereafter.