ESG and GRC Software M&A: A Founder's Guide to the 2025-26 Market

If you have built a software company in the environmental, social, and governance (ESG) or governance, risk, and compliance (GRC) space, you are sitting on one of the most sought-after assets in enterprise technology today. Regulatory mandates are expanding at pace across every major jurisdiction, corporate buyers are under mounting pressure to demonstrate verifiable sustainability credentials, and private equity firms are deploying billions to assemble platforms in this category. The result is a market where founders can command premium valuations -- but only if they understand who is buying, why, and what separates a good outcome from a great one.

The ESG and GRC software landscape has undergone a remarkable transformation in the past three years. What was once a fragmented collection of niche compliance tools has become a strategic imperative for enterprises worldwide. The EU's Corporate Sustainability Reporting Directive (CSRD), which began phasing in for the largest companies in 2024, has created an unprecedented wave of demand. While the directive was originally scoped to cover approximately 50,000 firms, the European Parliament's December 2025 Omnibus I simplification package significantly narrowed its scope to companies with over 1,000 employees. Nevertheless, the directive has created substantial demand for software that can collect, manage, audit, and report sustainability data. In the United States, while the SEC's climate disclosure rules have faced legal challenges, the direction of travel is clear: institutional investors, supply chain partners, and regulators are all demanding more granular ESG data. For founders who have built products that serve these needs, the timing could hardly be better.

This guide examines the current state of M&A in ESG and GRC software, profiles the key acquirers, benchmarks valuations, and offers practical advice for founders contemplating a transaction.

Market Overview

The ESG software market is experiencing rapid expansion. According to Mordor Intelligence, the global ESG software market was valued at approximately USD 4.1 billion in 2025 and is projected to reach USD 10.31 billion by 2031, representing a compound annual growth rate (CAGR) of 16.62%. Other analysts place the ESG reporting software segment specifically at around USD 1.29 billion in 2025, growing to USD 3.92 billion by 2032 at a CAGR of 17.2%, according to Coherent Market Insights. Whichever estimate you favour, the trajectory is steeply upward.

Cloud deployment dominates the market, accounting for roughly 75.3% of revenue in 2025, and hybrid models are expanding rapidly. Large enterprises represent approximately 52.4% of the customer base, but small and mid-sized companies are the fastest-growing segment, with adoption rates climbing at over 22% annually as CSRD and similar mandates extend their reach down the corporate size spectrum.

The broader GRC software market is equally dynamic. Workiva, recognised as a Leader in both the 2025 Verdantix Green Quadrant and multiple analyst rankings, has built a platform centred on integrated reporting, regulatory disclosure management, and connecting decentralised data across finance, risk, and sustainability functions. Diligent, which completed its acquisition of Galvanize to become the world's largest GRC SaaS company, serves over 23,000 clients and has continued to expand through bolt-on acquisitions. OneTrust, named a Leader in the 2025 IDC MarketScape for Worldwide GRC Software, serves over 14,000 global brands with a platform spanning privacy, AI governance, risk management, and third-party oversight. NAVEX, with its NAVEX One integrated platform, serves over 13,000 organisations globally. And Sphera, which generates more than USD 300 million in annual revenue serving over 8,400 clients, provides risk management software and consulting across environmental, health, safety, and sustainability domains.

Europe leads the market with a 34.9% revenue share, driven by CSRD and related directives, while Asia-Pacific is the fastest-growing region at a 21.25% CAGR. Banking and financial services represent the largest vertical (24.6% of the market), with energy and utilities expected to grow fastest at a CAGR of 19.85%.

M&A Activity and Deal Flow

The ESG and GRC software space has seen a sustained wave of M&A activity, driven by platform builders seeking to assemble comprehensive offerings and private equity firms recognising the sector's durable growth characteristics.

Major Deals

Blackstone's Sphera Exit (2025): One of the most significant transactions in the sector is Blackstone's planned sale of Sphera, with a target price of approximately USD 3 billion. Blackstone acquired Sphera in 2021 for USD 1.4 billion, and the company has since expanded through acquisitions including SupplyShift, a supply chain sustainability software provider. The potential exit, managed by investment banks William Blair and Evercore, would represent a roughly 2.1x return on invested capital in four years. Sphera's strong financial profile -- over USD 300 million in annual revenue and more than USD 100 million in EBITDA -- made it an attractive candidate despite headwinds from shifting US climate policy and elevated interest rates.

Goldman Sachs and Blackstone Acquire NAVEX (October 2025): A consortium led by Goldman Sachs Alternatives, with Blackstone as co-investor, completed a majority stake acquisition of NAVEX from BC Partners (which retained a significant minority stake) and Vista Equity Partners (which exited entirely). While the deal value was not publicly disclosed, NAVEX's position as a market leader with over 13,000 customers and its integrated NAVEX One GRC platform made it a highly coveted asset. The acquirers have stated their intention to accelerate NAVEX's global expansion and product innovation.

OneTrust and Thoma Bravo (2024-25): OneTrust, valued at USD 4.5 billion in its July 2023 funding round and now reportedly generating over USD 500 million in annual recurring revenue, has been in discussions with multiple private equity firms, including Thoma Bravo, Vista Equity Partners, Blackstone, and Silver Lake. The company also divested its Ethics and Compliance Business Division to EQS Group (backed by Thoma Bravo), which included the Convercent platform and served over 1,000 customers globally. This divestiture signals a strategic refocusing on OneTrust's core privacy, data governance, and AI compliance capabilities.

Diligent's Acquisition Strategy: Diligent has been one of the most active acquirers in the space, completing a series of deals to build a comprehensive GRC platform. Notable acquisitions include Galvanize (making Diligent the world's largest GRC SaaS company), Steele Compliance Solutions, Accuvio (valued between USD 26 million and USD 32 million, focused on ESG data management), and most recently Vault, an AI-driven ethics and compliance platform.

Deloitte and Workiva Partnership: While not an acquisition per se, Deloitte's launch of four ESG accelerators built on the Workiva platform illustrates how the ecosystem is evolving. These accelerators target CSRD compliance specifically, covering double materiality assessments, financed emissions calculations, and regulatory gap analysis. Such partnerships often precede deeper integration or acquisition activity.

Private Equity Activity

Private equity has emerged as the dominant force in ESG and GRC software M&A. The sector's characteristics -- high recurring revenue, strong retention rates, regulatory-driven demand, and significant room for platform consolidation -- align perfectly with the PE playbook. Firms active in the space include Blackstone, Goldman Sachs Alternatives, Thoma Bravo, Vista Equity Partners, BC Partners, and Silver Lake. The pattern is consistent: acquire a platform, bolt on complementary capabilities, drive organic growth through the regulatory tailwind, and exit at a significant premium.

Valuation Benchmarks

Valuations in the ESG and GRC software sector reflect the combination of strong growth dynamics, regulatory tailwinds, and platform scarcity. While publicly disclosed multiples remain relatively rare given the prevalence of private transactions, the available data points provide useful guidance for founders.

Metric	Range	Notes
Revenue multiple (SaaS)	8x-15x ARR	Higher end for pure-play ESG with strong NRR
EBITDA multiple	20x-30x+	Sphera's ~USD 3bn valuation on ~USD 100m EBITDA implies ~30x
Revenue growth premium	+2-4x multiple uplift	Companies growing >30% YoY command significant premiums

Sphera's potential USD 3 billion exit on more than USD 300 million in revenue and over USD 100 million in EBITDA provides one of the clearest benchmarks: approximately 10x revenue and 30x EBITDA. This reflects both the company's scale and the strategic value of its customer base and data assets.

OneTrust's USD 4.5 billion valuation in 2023 on approximately USD 250 million in ARR at the time implied roughly 18x ARR, consistent with high-growth SaaS companies in regulated verticals. The company has since grown ARR to over USD 500 million.

Several factors drive premium valuations in this sector:

• Regulatory lock-in: Products embedded in compliance workflows are exceptionally sticky; once a company has configured its CSRD or SEC reporting around a particular platform, switching costs are very high.
• Data moats: Companies with proprietary ESG data sets (emissions factors, supply chain mappings, life cycle assessment databases) command premiums because the data itself is difficult to replicate.
• Net revenue retention: GRC platforms with NRR above 120% demonstrate both product stickiness and strong expansion dynamics.
• Multi-regulatory coverage: Products that address multiple frameworks (CSRD, SEC, ISSB, GRI) simultaneously are more valuable than single-framework solutions.
• Enterprise customer concentration: Large enterprise customers with multi-year contracts provide revenue predictability that buyers prize.

Founders should note that valuations can vary significantly based on whether the buyer is a strategic acquirer (typically willing to pay more for synergies) or a financial sponsor (more disciplined on entry price but willing to support growth investment). In the current market, competitive processes involving both types of buyer are yielding the strongest outcomes.

Key Acquirer Profiles

Blackstone

Blackstone has emerged as one of the most active investors in ESG and GRC software. Its acquisition of Sphera in 2021 for USD 1.4 billion, subsequent investment alongside Neuberger Berman, and now planned exit at approximately USD 3 billion demonstrates the firm's conviction in the sector. Blackstone's co-investment in the NAVEX consortium further signals its long-term commitment. The firm typically targets companies with USD 50 million or more in revenue and strong recurring revenue characteristics.

Goldman Sachs Alternatives

The NAVEX acquisition marks Goldman Sachs Alternatives' entry into the GRC software space as a lead investor. The firm's resources and global network position it to drive international expansion for platform companies in this category.

Thoma Bravo

Thoma Bravo, with its extensive portfolio of software investments (42 acquisitions listed as of December 2025), has been exploring opportunities in the GRC and privacy space, including discussions around OneTrust. The firm's playbook of operational improvement and strategic bolt-on acquisitions is well suited to the ESG software market.

Diligent (Insight Partners)

Backed by Insight Partners, Diligent has pursued an aggressive acquisition strategy to build the world's largest GRC SaaS platform. The company targets smaller, specialised vendors that fill gaps in its offering, making it a natural acquirer for founders with niche ESG or compliance products.

Strategic Acquirers

Large enterprise software companies including SAP, Salesforce, IBM, and Thomson Reuters have all expanded their ESG and GRC capabilities through acquisition. For founders, these buyers often offer the highest valuations because they can generate immediate cross-selling synergies with their existing customer bases.

Consolidation Drivers

Several powerful forces are accelerating consolidation in ESG and GRC software:

Regulatory expansion: While the CSRD's scope was narrowed by the December 2025 Omnibus I package, it still brings thousands of large companies into mandatory ESG reporting. Similar mandates are emerging in the UK, Australia, Singapore, Japan, and other jurisdictions. Each new regulation creates demand for software that can handle the complexity of multi-framework reporting.

Buyer fatigue with point solutions: Enterprise CIOs are increasingly resistant to managing dozens of separate compliance tools. This creates demand for integrated platforms and drives acquirers to assemble comprehensive offerings through M&A.

Data as competitive advantage: The most valuable ESG software companies are those with proprietary data assets: emissions factors databases, supply chain risk maps, life cycle assessment libraries. Acquirers recognise that these data moats are extremely difficult to replicate organically.

AI integration: The application of artificial intelligence to compliance workflows (automated data collection, anomaly detection, reporting generation) is creating a new wave of innovation and acquisition activity, as incumbents seek to acquire AI capabilities rather than build them.

PE fund lifecycle: Several major PE-backed platforms are approaching the end of their typical hold periods, which is likely to trigger a cascade of secondary transactions and further consolidation.

Supply chain due diligence mandates: Beyond direct reporting obligations, companies are increasingly required to assess and disclose ESG risks in their supply chains. The EU's Corporate Sustainability Due Diligence Directive (CSDDD) and similar frameworks in other jurisdictions are creating demand for supply chain mapping, risk assessment, and monitoring software. This represents a significant adjacent market for ESG software vendors and an additional driver of acquisition activity.

Convergence of ESG and financial reporting: The integration of sustainability data with financial data is becoming a strategic priority for CFOs. Platforms that can bridge the gap between traditional financial reporting (ERP, EPM) and ESG disclosure are particularly valuable. This convergence is driving partnerships and acquisitions between financial software companies and ESG specialists, as evidenced by Deloitte's accelerators built on the Workiva platform.

What This Means for Founders

If you are a founder in the ESG or GRC software space, the current market presents a compelling window of opportunity. Here is what you should consider:

Timing favours sellers. The combination of regulatory tailwinds, PE appetite, and strategic buyer interest is creating robust competition for quality assets. This dynamic is unlikely to persist indefinitely; regulatory implementation timelines will eventually normalise, and buyer appetite may moderate as platforms reach maturity.

Recurring revenue is paramount. Buyers in this space strongly prefer SaaS models with high net revenue retention. If you have consulting or services revenue mixed with software, consider how to demonstrate the software component's standalone value and growth trajectory.

Data assets matter enormously. If your product incorporates proprietary data sets (emissions factors, regulatory mappings, benchmarking data), quantify their value and defensibility. These assets can significantly increase your valuation premium.

Multi-framework coverage commands a premium. Products that address CSRD, SEC, ISSB, GRI, and other frameworks simultaneously are far more valuable than single-framework solutions. If you can demonstrate broad regulatory coverage, highlight this in any sale process.

Prepare for diligence on customer quality. Acquirers will scrutinise your customer base carefully: enterprise logos, contract durations, renewal rates, and expansion dynamics. The strongest outcomes come from companies that can demonstrate a concentrated base of large, long-tenured customers with strong upsell trajectories.

Run a competitive process. Given the number of active buyers (both PE and strategic), a well-managed competitive process is essential to maximising value. The presence of multiple credible bidders creates the leverage needed to achieve premium terms.

A Generational Opportunity

The ESG and GRC software market is at an inflection point. Regulatory mandates are expanding globally, enterprise demand for integrated platforms is intensifying, and financial and strategic buyers are competing aggressively for quality assets. For founders who have built products that help organisations navigate the growing complexity of sustainability reporting and compliance, this represents a generational opportunity.

Valuations in the sector reflect these dynamics, with revenue multiples of 8x to 18x ARR and EBITDA multiples of 20x to 30x or higher for best-in-class companies. The key to maximising value lies in demonstrating strong recurring revenue, proprietary data assets, multi-framework regulatory coverage, and enterprise-grade customer relationships.

Whether you are ready to pursue a transaction now or are planning for a sale in the next 12 to 24 months, understanding the current landscape is essential to making informed decisions.