Routeware acquires recently spun-off Rubicon fleet tech business

Private equity-backed Routeware has acquired Wastech, a holding company for Rubicon Smart City and Rubicon Pro, the buyer announced Tuesday. The two digital fleet management services were spun off from Rubicon in a May transaction.

The deal provides a landing point for the services that were once touted as a potential new revenue stream for waste broker and tech company Rubicon, which has struggled to become profitable since going public 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 serving the circular economy.

“Our North Stars are super, super similar,” Rafalowski said. “[The acquisition] makes a ton of sense, and there’s technology synergies that are there.”

Rubicon Smart City and Rubicon Pro are software provided to clients via 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 provides route optimization and fleet solutions for private waste haulers.

Digital services are on the rise across the waste and recycling industry, providing artificial intelligence-assisted camera technology and route and fleet optimization, among other solutions. The appetite for these services led private equity firm EQT to pursue a majority stake in software provider AMCS. Software company Reconomy also acquired Lincoln Waste Solutions this August as it looks to get more involved in brokerage and digital service spaces. 

From the start of 2024 to the May transaction, Rubicon reported Smart City and Pro had generated $4.1 million in revenue with a net loss before income taxes of $1.1 million.

Based in Portland, Oregon, Routeware has been building its software platform for more than 20 years. Rafalowski said he believes there is “tremendous” opportunity to continue growing its client bases, noting Routeware today serves a fraction of the roughly 700,000 vehicles in heavy-duty fleets across North America.

“When I think about the market, it’s not just about how many cities are out there. It’s really how many trucks need to be enabled,” 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 WIN Waste senior vice president.

As part of this transaction, Rodina Capital will stay on as a minority investor. That firm is run by Andres Chico, a long-time member of Rubicon’s board. Chico is partnering with another Rubicon investor, Jose Miguel Enrich, on a take-private offer for the remaining Rubicon business, which remains pending.

Looking ahead, Rafalowski said Routeware will continue to be acquisitive in the waste technology space and could close as many as two to four deals per year.