Media Update, page-1584

hi morgan i could only get the first article

Growth capital in water flows to the ‘last mile’

Savvy investors are increasingly backing start-ups that seek to capitalise on perceived utility failings. A series of decent exits in the sector are feeding the frenzy.

More than $5 billion of equity capital has been invested into water start-ups since 2002, across more than a thousand separate interventions, according to a new analysis of data compiled by Global Water Intelligence.

A glance at the table below, which shows deals tracked by GWI’s WaterData platform over the course of 2019, shows that capital flows into water are increasingly being directed to those areas where there is a perception that the traditional utility model is failing – whether through indifference, inertia, or indolence.

Money is increasingly being put to work in areas such as advanced customer engagement through intelligent home water monitors, leak detection, prepaid metering and billing software, and point-of-use water filtration devices.

Such interventions frequently target the “last mile” of pipe – i.e. the privately owned infrastructure located beyond the boundary where a utility’s responsibility ends. A widespread feeling that water utilities are largely indifferent to enhancing the customer experience has been compounded by fears over lead, PFAS and other contaminants in water supplies, and this is playing into the hands of start-ups looking to push the next big thing in water.

“There’s a lot of value in the last mile in terms of engaging with the final customer,” observed one market veteran who advised on a sizeable growth funding round in 2019. “When you think about the customer engagement relationship and the lack of trust in utilities, people don’t feel protected,” he told GWI.

Point-of-use filtration solutions are of particular interest, given that they use established technology, and are therefore instantly marketable to consumers suspicious of the quality of their piped water. Early consideration is often given to the exit strategy here, too, given the pace at which private equity-backed behemoths such as Culligan and Waterlogic are buying up smaller point-of-use players with cutting-edge technologies to promote alongside their own.

A flurry of high-profile exits is always useful in terms of catalysing further flows into a sector, and 2019’s crop in water was particularly notable. While XPV returned capital to its LPs by injecting two of its wastewater protégés into a new investment platform co-financed by KKR, Innovyze acquired AI leader Emagin as a bolt-on for its infrastructure data analytics platform, while DuPont bought out membrane-aerated biofilm reactor specialist OxyMem.

Indeed corporate venture arms are getting involved in water to a greater extent than ever before, with Suez, Sumitomo, Uponor, Pentair, Kurita, Marubeni, and Saudi Aramco all using their clout to back a variety of water technologies last year.

The most spectacular exit of all must, however, be Culligan’s acquisition of AquaVenture, the desalination and point-of-use firm backed by Doug Brown after he exited his previous investment, Ionics, in 2004. Together with outfits including the Virgin Green Fund and Element Partners, Brown ploughed serious money into Seven Seas Water before merging it with point-of-use firm Quench in 2014. Element Partners’ hefty stake in the combined business should net it a payout in the hundreds of millions of dollars, while Brown himself looks to be in line to take home $48 million.

With returns like these on offer for patient investors, it is no surprise that water continues to attract a healthy flow of capital, from individuals right through to private equity giants.

SELECTED SEED/VENTURE/GROWTH CAPITAL INVESTMENTS IN WATER (2019)

CompanyCountryLine of businessInvestor/sInvestment
Cerahelix, Inc. a
USA
Small-pore ceramic membranes
Undisclosed
$0.14m
TAPP Water
Spain
Point-of-use water filtration
Bluewater/Yabeo
€1.8m
CityTaps
France
Prepaid water meters/billing software
Global Innovation Fund
€2.2m
De.mem Limited b
Singapore
EPC for decentralised treatment plants
Pathfinder AM/Perennial Value Management/Others
A$12m
Infinite Cooling Inc.
USA
Water capture in thermal power plants
Material Impact/Others
$4m
Cambrian Innovation, Inc.
USA
Distributed wastewater treatment
Spring Lane Capital
$17.2m
Conservation Labs
USA
Point-of-use water meter and smart app
IrishAngels/Amazon Alexa Fund/Serra Ventures/Mountain State Capital/Innovation Works
$1.7m
CycloPure, Inc. b
USA
Adsorption of micropollutants from water
Dr. Irwin Jacobs
$7.5m
Industrial Phycology
UK
Nutrient removal from water using algae
MEIF Early Stage Fund/University of Bristol Enterprise Fund
£0.7m
Calix Limited
Australia
MgO suspension for wastewater treatment
Various
A$12.9m
Kibosh
UK
Rapid repair kits for water pipe leaks
Par Equity
£0.8m
WEGoT Utility Solutions
India
Smart sensors and water usage analysis
GoFrugal/Shyam Sekhar/Brigade Enterprises
$2m
Fluence Corporation
Australia
Decentralised water treatment
Various
A$38.3m
Envirosuite Limited
Australia
Odour treatment
Undisclosed
A$10m
Ostara Nutrient Recovery c
Canada
Nutrient recovery from wastewater
Wheatsheaf Group Limited/VantagePoint Capital Partners
$5m
Inflowmatix
UK
Water network data analytics
Suez Ventures
£2.8m
Diamidex (C4Hydro)
France
Rapid detection of legionella in water
Rugby Angels/SATT Sud-Est/Dr Farid Mersali
€2m
Fonto de Vivo
France
Water purifiers for humanitarian aid
Litto Invest SCR/Crédit Agricole Atlantique Vendée
-
Soil Scout
Finland
Wireless moisture sensors
Husqvarna Group
-
Fractal Engenharia
Brazil
Water management through big data
EDP Ventures Brasil/Criatec 3 Fund (INSEED Investimentos)
BRL4.5m
Plutoshift (f/k/a Pluto AI)
USA
Proactive performance monitoring using AI
Fall Line Capital/Unshackled Ventures/Individuals
$8m
PowerTech Water
USA
Capacitive coagulation
Mazarine Ventures/Bluegrass Angels/Others
$1.5m
120WaterAudit
USA
Cloud-based water software platform
HG Ventures/Allos Ventures/Greenhouse Capital
$7m
Envirosuite Limited
Australia
Odour treatment
ZZL Pty. Ltd.
A$2m
Sourcewater, Inc.
USA
Oilfield water intelligence
Bison Technologies/Marubeni Corporation
$7.2m
Modern Water plc
UK
Forward osmosis desalination
Various
£0.14m
Aquacycl
USA
Treatment of high-strength wastewater
The Roddenberry Foundation/Others
$4m
CropX
USA
SaaS for precision irrigation
Sumitomo Corporation/Armada Investments/TaL Capital
$10m
Shayp
Belgium
Leak detection using IoT technology
SRIB/Triodos Bank
€0.45m
Gradiant Corporation
USA
Industrial wastewater treatment
Shenzhen Yimeng/Shenzhen Songhe
-
Aclarity, LLC
USA
Electromechanical water purification
Maroon Venture/Springfield Venture Fund/Alchemy Group
$1m
Puraffinity
UK
Adsorbent media for PFAS removal
Kindred Capital/HG Ventures/Investiere.ch
£2.8m
Aquvio
India
High-recovery reverse osmosis
Technology Development Board
-
Weenat
France
Real-time water savings in precision ag
FAMM/Litto Invest/Unexo/Atlantique Vendée Innovation
€2m
Hero Labs
UK
Home leak detection using AI algorithms
Earthworm Group/Others
£2.5m
Mascara
France
Solar-powered desalination
CCD/GO Capital/WiSEED/Famae Impact/Gaia Impact Fund
€2.2m
Ziptility
USA
Digital mapping for buried infrastructure
Indiana University Philanthropic Venture Fund
$0.25m
Noveda Technologies, Inc.
USA
Cloud-based real-time water management
ID Global Corporation
-
Typhon Treatment Systems
UK
UV LED water treatment
Saudi Aramco Energy Ventures
$5m
Metron-Farnier
USA