While great water tech start-up IPO stories didn’t pepper the news sites this year, four watershed events from 2013 will be shaping 2014:
Texas leads the way for toilet to tap
The West Texas hamlet of Big Spring became the first city to bring indirect potable reuse into operation earlier this year. Direct Potable Reuse (DPR) treats sewage and blends it with drinking water supplies for immediate use. The process treats water to higher levels of purity than other sources of drinking water, but the “yuck factor” has held off DPR for years. At present, the only the only example of a DPR system in full-scale long term operation is in Windhoek, Namibia, where is has served 250,000 people since 1968.
Watch for more towns in West Texas and throughout the US Southwest to follow.
Public sector leadership—The Water Grand Challenge for Development
The White House Science and Innovation initiative kicked off a unique program this year, the USAID Water Grand Challenge for Development. In partnership with the Swedish Development Agencies (SIDA) and the Netherlands, the WGCD will provide $25M in seed funding for a few companies that will apply advanced solutions to tackle developing world water problems.
The WGCD is a bold step to bring innovation and entrepreneurship to water challenges.
Water has been the focus for a big chunk of foundation and development agency funding for the developing world over the last decade. These programs focus upon funding basic water solutions or changing the way people use water. While existing programs are important, the last decade has shown that incremental improvements in water management aren’t going to be enough. Early successes from this program in 2014 might drive a new wave of government and NGO-funded water technology programs.
Artemis is proud to serve as an advisor to USAID for this project.
A new engine for proving water tech innovation—LIFT
Water industry associations, the US EPA and over 100 major municipal and industrial water facilities launched a collaborative effort to streamline validation of new water technologies and approaches, the Leaders Innovation Forum for Technology. Read more..
Water defines a new investment community
The drought of venture investment has driven the best water tech growth companies to reach out to investors that go beyond classic early-stage investors in technology. In order to survive, water tech growth companies have been developing an investor community more diverse and more valuable than venture. The Cleantech Group estimates that $219 M of venture capital was invested in water tech deals in 2013, more than a 40% drop since 2012. At the same time, the number of investment deals rose to 82, meaning water tech investment deals were only $2.7 M each on average. Considering the number of $10M- $15M investments, these numbers would indicate a lot of small investments, very small investments. The hundreds of companies that have broken out with new projects this year found their capital outside of venture investors–the best of them are tapping into impact investors and government grant programs. Artemis will be focusing its efforts on this nascent investor community in 2014.