IT asset disposition company Sprout has received a majority investment from a New York City-based private equity firm, which predicts rising demand for ITAD services in the years to come.
Sprout and the equity firm, Recognize, today announced the deal, which closed in late December. They noted that current Sprout investor New Capital Partners, which has owned a stake in the company since 2019, will continue on as a minority investor. Financial terms of the deal weren’t disclosed.
“Ultimately, this partnership with Recognized is going to enable Sprout to scale our impact on sustainability and secure data management,” Tom Allison, president of Sprout, said in an interview. “This partnership is helping us respond to the growing global demand for what I call sophisticated ITAD solutions.”
Co-founded and led by CEO Shelly Li, Sprout launched in 2014 as SMR Worldwide, operating a single location in North Carolina. The company has grown steadily over the years, opening facilities in California, Texas and Massachusetts.
In 2020, the company rebranded as Sprout. In late 2023, Sprout acquired key assets of CircleIT, a former Oklahoma City ITAD firm that closed some of its operations and incorporated others into its new owner. Sprout’s client base includes more than 200 at-scale and hyperscale enterprises across 40 countries, according to the announcement.
Recognize has a focus on digital services companies, with other portfolio companies spanning cloud management, cybersecurity, AI engineering and other computing sectors. In announcing its investment, Recognize pointed to several factors that suggest a rosy outlook for ITAD market demand in the coming years.
“Increasing regulation and scrutiny around secure data destruction and ESG creates a significant and growing need for Sprout’s services,” said Charles Phillips, managing partner at Recognize, in a written statement.
Phillips added that the ITAD market is “currently in an inflection point,” highlighting advancements in computing and demand for generative AI that are “necessitating increasing infrastructure spending and hardware refreshes within the enterprise.” Sprout, he said, is “uniquely positioned” to meet that demand.
The investment is “a testament to everything we’ve done over the past 10 years,” Allison added.
