Private equity-funded Routeware has acquired Wastech, a holding company for Rubicon Smart City and Rubicon Pro, the buyer announced on Tuesday. The two digital fleet management services were spun off from Rubicon in a transaction in May.
The deal provides a landing point for the services once touted as a potential new revenue stream for waste broker and technology group Rubicon. which has struggled to become profitable since its IPO in 2022. Routeware CEO Paul Rafalowski said in an interview that the former Rubicon services will bring his company closer to its goal of providing end-to-end services for fleets that serve the circular economy.
“Our North Stars are very, very similar,” Rafalowski said. “(The acquisition) makes absolute sense and there are technological synergies.”
Rubicon Smart City and Rubicon Pro are software provided to customers for a monthly fee. Smart City provides fleet optimization solutions for more than 100 municipal heavy-duty fleets, including in Houston, Atlanta, and Miami. Rubicon Pro offers route optimization and fleet solutions for private waste disposal companies.
Digital services are on the rise in the waste and recycling industry, offering, among other things, camera technology with artificial intelligence and route and fleet optimization. The need for these services prompted private equity firm EQT to seek a majority stake in software provider AMCS. Software company Reconomy also acquired Lincoln Waste Solutions in August this year as the company looks to increase its involvement in brokerage and digital services.
Rubicon reported that Smart City and Pro generated revenue of $4.1 million and a pre-tax net loss of $1.1 million from the beginning of 2024 through the May transaction.
Routeware, based in Portland, Oregon, has been developing its software platform for more than 20 years. Rafalowski said he believes there is “tremendous” opportunity to further expand the customer base, noting that Routeware today serves only a fraction of the approximately 700,000 vehicles in heavy-duty fleets across North America.
“When I think about the market, I’m not just concerned with how many cities there are. It’s more about how many trucks have to be registered,” Rafalowski said.
Routeware is backed by California-based K1, which invests in enterprise software companies. The purchase of these former Rubicon services comes about a year after Routeware’s last major acquisition, when it bought Recyclist, a provider of waste and recycling compliance and sustainability software. Routeware also recently hired Chief Revenue Officer Eric Speiser, a former senior vice president of WIN Waste.
As part of this transaction, Rodina Capital remains a minority investor. The company is led by Andres Chico, a long-time Rubicon board member. Chico is working with another Rubicon investor, Jose Miguel Enrich, on a tender offer for the remaining Rubicon business, which is still pending.
Looking to the future, Rafalowski said Routeware will continue to pursue acquisitions in the waste technology sector and could conclude up to two to four deals per year.
