For a start-up to succeed, it needs a well defined map of the world. That map needs to be as distorted as the famous “New Yorker’s View of the World from 9th Avenue.” This cartoon portrays a map of the world beyond the Hudson River that is a barren landscape marked only by Utah and Las Vegas before a tiny Los Angeles lies at the edge of the Pacific Ocean. China, Japan and Russia appear as sand dunes that mark the far edges of the world. Similarly, water tech companies have to see the world not only in terms of where water is scarce, but also where customers will pay a premium for advanced technologies. They need to define their view of the world based on where new technology can gain momentum.
What brought you to found Desalitech?
I watched my father develop a new desalination technology that seemed like an elegant and important innovation. It had worked well in initial piloting. In the beginning, I just wanted to connect him with his first customers. I helped him sell the first reference sites for the product, and I saw the potential. I haven’t looked back since then.
What does Desalitech do?
We’ve taken reverse osmosis, which is the gold standard for treating water, and developed a winning product around a new proprietary architecture. Desalitech’s ReFlex™ product line, based on our Closed Circuit Desalination™ technology, generates 70% less wastewater, saves about 35% of the energy, and does all of that with greater reliability and flexibility. It handles a wide range of water—from sewage, to high salt well water to ultra-pure industrial process water. Desalitech Reflex is adaptive; the system automatically works according to site priorities, responding to conditions as they change. It can be tuned for high water or energy savings, high water output, or low waste.
How are you building momentum?
Since we moved to the United States in 2013, we’ve built a team of seasoned industry leaders that share a vision for how technology will change water. We have developed a stream of revenues through partnerships with water treatment companies. Over the next few weeks, we will be announcing installations of new projects at several Fortune 100 companies.
As we grow, we’re seeing the potential for Reflex to address water scarcity. Its particularly exciting to be outfitting farmers to fight the drought in the Central Valley in California by unlocking brackish water sources.
Also, its exciting to see public leadership driving water tech. We’ve been fortunate to gain the support of Deval Patrick, the Governor of Massachusetts, who has brought us on missions to Tokyo, Mexico City, and Israel to expand our operations.
What is your big dream for Desalitech?
Our mission is to become the leading solutions provider for high efficiency water and wastewater treatment. We’ve set our eye on industrial water treatment challenges, and we’re aiming to serve an even wider group of applications going forward.
Society cannot sustain the current waste of precious resources. Change is inevitable, and we are going to be part of it. In the process, I would like to see Desalitech set new expectations for the potential of a water tech start-up.
Mr. Efraty is the co-founder and CEO of Desalitech. He is a recognized expert and visionary in the global desalination market. Under his leadership, the company has built a world class international team, demonstrated, productized and commercialized its product and built an international supply chain. Mr. Efraty has closed venture investments from Liberation Capital and the AquaAgro Fund. Before founding Desalitech, Mr. Efraty served in R&D project management, technology leadership and technical sales roles in the high-tech industry.
Mr. Efraty holds B.Sc. and M.Sc. degrees in Computer Science. Away from work (as much as he is ever way from work…), Mr. Efraty is a marathon runner, plays soccer, and enjoys skiing with his wife and son. He currently lives in the greater Boston area, adjacent to the Newton headquarters of Desalitech.
Korean chemicals giant LG Chem’s announcement that it is purchasing NanoH20 adds a new chapter to that company’s rise from a UCLA lab to high profile leadership in a new generation of water tech companies.
Agile, innovative entrepreneurial management has been decisive in driving NanoH20 forward. Specifics of the acquisition have not been disclosed and the transaction is set to finalize on April 30. Established in 2005, NanoH20 is part of the first wave of start-ups that have brought start-up business strategies from the technology world to the water industry.
How will LG realize the full value of NanoH20’s entrepreneurial team and its corporate culture? NanoH20 broke new ground with five tactics that have been proven in high tech startups from software to solar:
Technology & business from the first day
NanoH20 was founded by an experienced technology entrepreneur, Jeff Green, and a leading-edge technology developer, Bob Burk. From its first days, NanoH20 developed its products and its strategy with an eye to how innovative approaches—in business as well as technology– might break through market barriers.
Finance from strong partners
NanoH20 launched with a $5M seed investment from top tier investor Khosla Ventures. With that early support, NanoH20 had the resources to develop the product as well as a team behind it.
As the company grew into an international player, NanoH20 raised capital from forward-looking water industry powers, including chemical giant BASF and oil refiner Total. It broke new ground by raising capital from CalPERS Clean Energy & Technology Fund, a large scale, long term investor that has led investments in sustainable energy.
Product design for retrofits
NanoH20 built its solution to allow retrofitting onto existing water operations. This product strategy tapped into the established budget structures to speed purchase decisions. For municipalities and industrial water users that already have water purification membranes, NanoH20 serves as an upgrade that provides big energy savings.
NanoH20 focused its early marketing upon organizations recognized as authorities in order to gain strong validation early. Its first projects included the US Navy, at its Seawater Desalination Test Facility (SDTF) in Port Hueneme.
Focus upon diverse group of markets
Early in its market launch, NanoH20 went beyond the municipal market to target early-mover commercial and industrial markets, like accommodations and oil & gas. The company’s first major installation was in the Cayman Islands, and it launched in critical markets from China to Saudi Arabia. In October 2013 NanoH2O announced a $45 million investment into a manufacturing facility in Liyang, China.
As part of LG Chem, NanoH20 may continue to break new ground in the water industry. With big company resource and market presence, will we continue to see NanoH20 drive development of game-changing intellectual property? New partnerships? New investment vehicles?
The Shanghai Tower will serve as a mammoth 125-floor rainwater harvesting structure. The breathtaking outside shell borrows the best designs from nature, collecting rain to purify and replenish 675,000,000 liters of water each year. Combining stores, offices and apartments, the building will serve as an icon for water resource management in China, as the country struggles to find enough clean water for its people and its growing economy.
“Unfortunately, most of the buildings in the world are not Shanghai Towers – most of the buildings aren’t new,” noted Dave Pogue, Director of Sustainability for CB Richard Ellis in the Artemis Project webinar earlier today. “While some of our buildings are new, we also need to be concerned about managing the ‘rest of the mess’,” David Pogue, CB Richard Ellis. “While some of our buildings are new, we also need to be concerned about managing the ‘rest of the mess’,” Pogue explained. CBRE manages over 1.2 billion square feet of property in the Americas, and the bulk of those buildings are not new. Environmental considerations must contend with budgets. “We have a lot of buildings struggling trying to find a way to be better in a water constrained world,” Pogue stated.While water is vital, it is virtually free today. And water seldom gets attention until there is a crisis. Pogue noted that basic water saving devices such as toilets and urinals generate only a trickle of benefits and take 8 to 10 years to pay back. They’re better than nothing, but still just a small drop in the bucket.We’re still waiting for the onsite appliance that reclaims water and treats rainwater with the precision and beauty of a miniature Shanghai Tower. Small-scale onsite waste water systems operate today, recycling water from sinks and toilets to save over half of the drinking water used by an apartment building. Companies like Dominic Sulik’s Natural Solutions Utilities are offering whole building solutions for onsite water management that match much of the savings from the Shanghai Tower. This offering is a service that pieces together existing solutions.We can see the crises are coming, but we are still waiting for the Apple version of a building water system that matches the benefits of the Shanghai Tower. “Its not about the cost of water, it’s about the downtime and the risk for the property,” John Macomber, Harvard Business School.“Its not about the cost of water, it’s about the downtime and the risk for the property,” notes John Macomber, Professor of Sustainability at Harvard Business School. If there is a lower cost of capital for a better risk-adjusted return on the property, then onsite water management makes sense financially.Professor Macomber suggests that real estate properties such as accommodations and hospitality operations—hotels, spas, and hospitals—are examples of some of the early candidates for water tech. “The beach head for water tech is where the landlord pays for the water, where the landlord can effectively measure the benefit of an intervention, and where the volume of water used really matters to the economics.”
The most common question I field when I mention desalination is, “Doesn’t that take a lot of energy?”
The truth is, yes, it does. That’s why you’ll not hear me advocate for desalination without strongly insisting on complementary conservation.
We must redouble our conservation efforts by upgrading infrastructure intelligently and in no way excuse wasteful water practices by pointing to the plentiful, historical ingredients of desalination: oceans of water and oceans of coal.
Each barrel of freshwater extracted from the ocean has costs, so we should use the water as efficiently as possible, recycling it and then remediating it into the water cycle.
Yet, conservation alone isn’t going to meet our water needs. The world’s population is expected to increase by 2.5 billion over the next 30 – 40 years, while the current, natural water cycle is not expected to increase its output.
Just as we must increase conservation, we must prepare for the impending water plateau by increasing our capacity to produce fresh water.
Hence my excitement in June when I heard about Desalitech’s successful pilot.The test purified Mediterranean saltwater, using Desalitech’s proprietary Closed-Circuit Desalination saltwater reverse osmosis method (SWRO-CCD).
Using common components, without energy recovery, running a high-pressure pump at 81% mean efficiency and circulation pump at 37.5% mean efficiency, the pilot achieved 48% recovery at 2.05 – 2.40 kWh per cubic meter of fresh water. For comparison, Perth’s desalination plant using Energy Recovery from ERI achieves 43% recovery at 2.32 kWh/m3.
Desalitech aims to increase the mean efficiency of the off-the-shelf, high-pressure pump to 88%, to provide recovery at 1.75 – 1.95 kWh/m3 on Mediterranean saltwater. The same pumps used on ocean water could produce equal recovery at 1.5 – 1.7 kWh/m3.
Desalitech’s implementation reduces the cost of powering desalination processes. It also decreases capital expenditures. Nadav Efraty, CEO of Desalitech, told me, “This technology is reducing energy consumption by up to 50% when we utilize about twice the membranes, reduces energy by about 10-15% when we use only 40% of the membranes compared to a conventional plant, or reduces energy about 30% when we utilizes the same amount of membranes, but in this mode, since we don’t utilize any form of energy recovery, we still see a reduction in capital expenditures.”
Even with less than half the membranes, the technology still sees 10-15% energy reduction. That’s a 60% savings on capital expenditures for membranes.
As an added element of efficiency, plants utilizing Desalitech’s technology can turn plants up and down depending on demand: Nadav explained, “The very same unit can operate at very high production rates part of the day (when power rates are low for example) and in extremely low energy consumption the rest of the day.”
Desalitech does this by independently controlling component flow rates, recovery, pressures and cross flow irrespective of the other variables.
Following their successful pilot, Desalitech is addressing brackish water. Desalitech’s three BWRO installations are fully operational facilities, capable of producing 10,000 m3 fresh water per day.