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?