Water, Water Everywhere – But Where’s The Funding?
How many times did you think about water this month?
If you’re like most people in developed countries, you probably only thought about it when paying your water bill – or if there were news articles about floods or droughts or oceans. If you’re in parts of the world where water is not plentiful, the chances are that you thought about it if you had to plan your day around when water was going to come out of the tap. If, like many of the poor, you had to walk miles or stand in queues to collect drinking water, you probably spent a large part of your day thinking about it.
Water is essential to life and yet, we don’t hear a great deal about innovation or venture capital funding or startups that are changing the world in this sector in popular media or news. Which brings up the question – where is the funding for innovation in this sector?
Venture capital funding in water is a relatively small investment compared to the investment in high-tech or even in some of the other clean tech sectors. For example, there was about $60 billion in venture capital invested in 2015 according to Mattermark. Of that, about $2 billion went into clean tech from the analysis performed by the Cleantech Group. Interestingly, about $45 million or less than 1% of that investment was in water. One reason for this lack of VC investment in water is the larger time required for returns. This may change as more companies start working in the data science and water space – but as of now, it still holds true.
So where else does investment in water come from? Corporations like Veolia will often fund technology that has been prototyped successfully, but needs more investment to scale.
What about innovations that are still at the conceptual or prototype stage? Funding for those are most likely to come from governments with grants for universities, labs and small businesses.
Perhaps the most interesting place to look for innovations in the water sector is to watch what communities are doing to solve their particular problems around the world. Water is one of those problems where people working together at the community level can create solutions that are as innovative as someone in an office with access to funding.