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What’s up with water going down?

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Investments in water & wastewater technologies were on a supposedly unsustainable high during the first half of 2012.  The latter half of the year saw relatively minimal activity, accounting for just over 12% of total water dollars invested in 2012.  What happened?

According to preliminary data from Cleantech Group, the number of deals dropped significantly – hovering near 50 in 1H12 but falling to less than 20 in 2H12.  It seems investors lost all interest in supporting private companies focused on drinking water treatment, as I saw no deals tracked for pure filtration or disinfection technologies.  I also noted the absence of big money going towards service providers like Golden State Environment and Doshio, which together accounted for $80MM in growth equity in 1Q12.

Taking a look at the investments that were made, it is apparent that wastewater is continuing to garner significant attention, with nearly half of 2H12 investor dollars going towards companies involved in the treatment of industrial and/or municipal wastewater.  Reuse was one of the more prominent themes here, which comes as no surprise given the heightened anxiety around climate change (and its impact on water scarcity) in the aftermath of events like Hurricane Sandy and global …

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A Thirsty Tourist in Thailand

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I spent Thanksgiving week traveling through Thailand.  It was my first trip there, and hopefully not my last – the country is amazing!  I love the people, the culture, the food, the views….and the free bottled water?  Yes, you read that correctly – free bottled water.  In Thailand, it is standard to receive 2-3 complimentary bottles of water in your hotel room, despite assurance from the government that the tap water is safe to drink.  As most tourists do, I erred on the side of “better safe than sorry”, and took the bottled water.  Though I must admit, I was somewhat ashamed to do so.

Isn’t the tap water in Thailand subject to WHO guidelines for drinking water quality, which would ensure that I am protected from harmful contaminants?  Doesn’t the organization pride itself on “producing international norms on water quality and human health in the form of guidelines that are used as the basis for regulation and standard setting, in developing and developed countries world-wide”?  Indeed it does, but I overlooked the difference between a guideline and a requirement – an extremely important distinction.  Guidelines are mere recommendations or targets that help ensure the quality of …

A “disruptive” blog post…

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The term “disruptive” is thrown around by just about everyone these days – investors, entrepreneurs, policymakers, and even Cleantech Group!  I fear the word is doomed to follow the same projected path of the word “sustainability”…   Before heading too far down that road, I’d like to get in my two cents on some of the water technologies I perceive to be “disruptive” in today’s world.

  • Amoeba.  A majority of commercial and industrial cooling tower operators have used the same [chemical] treatment system for decades and are hesitant to try anything new, even in the face of rising water and energy costs.  Many alternative treatment systems have been on the market for over a decade, but market penetration has been slow.  Non-oxidizing agents such as biocides, though more expensive, are increasingly being tested and talked about.
  • Axine Water Technologies.  According to data tracked through i3, over a quarter (27%) of venture capital dollars in the first half of 2012 went to companies providing solutions primarily applicable to industrial water users.  The growing presence and importance of this consumer segment stems from concerns around toxicity of wastewater streams, the use of treatment chemicals (and potential creation of byproducts), discharge

No Summit? No problem!

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Cleantech Group’s Water Innovation Summit, which was held last month at the Claremont Resort in Berkeley, CA, was an intimate, invite-only event.  While this unfortunately means that not everyone could make it, it also means we were able to conduct extremely focused and productive conversations around some of today’s hottest topics in water.  As an avid supporter of the Water industry, I thought it would be valuable to collect my thoughts and takeaways from the event in a whitepaper – “Water Innovation Summit: A Confluence of Minds.”  For those of you who missed the Summit, you can find the Executive Summary and a link to download the *free* whitepaper below.  In addition to providing an overview of the key Summit themes and events, I have attempted to include some personal and firm insight on the key issues in Water.

Executive Summary

  • Innovation at a water utility is driven by (at least) 3 C’s: Cost, Crisis, and Cool.
    • While all three C’s are of significant importance to a utility, Crisis culled the most attention as growing populations force water providers to seek new sources of water.
    • Within these broad parameters lie a world of other innovation opportunities – emerging markets

Down with the drought!

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http://kschnack.wordpress.com/category/dso-colleagues/

Since moving to San Francisco, I stopped keeping track of the seasons.  And every year, I don’t realize it is summer until I start receiving pictures from my friends back in Texas showing me the 100+ degree temperatures, as measured on their car dashboard.

 

 

 

Going hand in hand with the unbearable heat are the severe droughts that Texas has consistently experienced.  With no water to keep temperatures lower comes the problem of no water for people – period.  Last week, nearly 15 heat records were broken in Texas, and last year’s drought has been recorded as one of the worst ever.

Texas has long suffered from extreme droughts.  With no real indication of this being a “phase,” the state is ever more concerned with water scarcity, and is taking action.

The Texas Water Development Board (TWDB) is a funding agency focused on the long term planning for development of water resources in the state.  The way I see it, TWDB has been addressing water scarcity concerns in two of the most useful ways.  The first is the promotion of water reuse, which happens to be the largest focus area for the agency.  In fact, the agency recommends …

Industrializing the Industrial Water Market

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Aqwise, a fixed biofilm water and wastewater treatment solutions provider, raised $4.5 million in a financing round led by Triveni Engineering & Industries.  More recently, Epuramat, a provider of compact, energy-efficient and chemical-free wastewater treatment solutions, raised over $10 million in a Series B financing round.  These companies are ideal representatives of the stellar investment trends we’ve seen in water lately – not only because they successfully raised funding from the investor community, but because they both provide industrial wastewater treatment solutions.

Last week, Sheeraz Haji (CEO) and I led a webinar focused on the industrial wastewater market (watch a free replay here).  We kicked things off with a quick look at VC trends in water, which included a view of where money is actually going from a technology, application, and target user perspective.  In doing this analysis, I learned that over half (52%) of VC dollars in the first half of 2012 went to companies developing wastewater treatment solutions – more than I had suspected.  Digging deeper into the numbers, it was uncovered that most of these solutions were specifically tailored for industrial users.

The growing appeal of the industrial wastewater treatment market for entrepreneurs and …

Water: Week in Review

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With all the attention that the Oil and Gas sector has so far received for its lavish use and disposal of water, it was only a matter of time before we saw companies respond with new products and partnerships to address problems.  While we’ve already begun to notice this trend in the past year, this week in particular stands out given the new products from both OriginOil and Aquatech.  Separately, stormwater management is receiving special attention via new partnerships focused on educating, implementing, and managing stormwater solutions for residences and communities alike.  For details on those products, and other news stories in Water, continue reading below.

M&A/ Partnerships

Projects

  • A Gold Coast desalination plant that provided safe drinking water to residents of Brisbane during the 2011 floods is now expected

Water: Week in Review

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Headworks and its sister company, Headworks BIO, have had an exciting week.  While one company secured an option agreement with Texas A&M University (to license technology), the other landed a nearly $1MM contract to provide screens for an advanced wastewater treatment plant.  Meanwhile, Grundfos, Ostara, and Mitsui all dipped their feet in the VC/M&A world this week.  The details on these stories and more can be found below.

M&A/ Partnerships

Projects

Water: Week in Review

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Veolia is keeping itself busy with new contracts and existing lawsuits, while Groupon is showing interest in water – the company recently teamed up with a nonprofit to raise money for water quality testing at California beaches.  Details on these stories, and more, can be found below.

M&A/ Partnerships

Projects

  • The US Bureau of Reclamation has awarded a $10.75m contract to design-build firm McMillen to

The early bird gets the worm…

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I see it all the time – a great idea, turned into a product, gone through a testing process, and earned certification….but now what?  So often, innovators don’t know where to turn when seeking partners for pilot testing.  And so often, they eventually run out of money and take their technologies and ideas elsewhere.  In an effort to keep the innovation within Water & Wastewater, I’d like to highlight a few water utilities that have “lent a helping hand” to entrepreneurs – and come away with successful contracts.

American Water – Four of American Water’s utilities were offered up for piloting new smart grid technology from ENBALA Power.  The technology aimed to increase efficiencies, thereby reducing energy and water usage, and ultimately, costs.  This was done through demand response – an energy management program that allows users to earn revenue if and when electricity consumption is reduced during peak demand hours.  The two companies announced a formal partnership in the fall of 2011.

Clean Water Services – The Oregon water resources management utility implemented technology from Ostara Nutrient Recovery Technologies at a pilot project, and made plans to build a full-scale plant that utilized the new technology if …