Can you make a profit from Water ventures? A commonly held perception is that you cannot. Roy Wiesner, the author of this article, begs to differ, bringing his considerable experience to examine both sides of this issue.
The article outlines the unique issues besetting Water as an investment domain:
- There is a general perception that water should naturally be a “free” resource, leading to regulated prices well below actual cost.
- Water projects require massive capital expenditures, with a long return on investment (ROI) delay.
- In many countries, the water sector is highly fragmented (there are more than 50,000 water utilities in the United States alone).
- The sector is heavily regulated by risk-averse authorities.
It then explains how, despite these obstacles, Water is poised to become a major field of venture in the coming years. The increasing global need for water and the droughts that thwart it lead to many new opportunities for innovative companies that work on control, monitoring, desalination, reclamation, and waste water management. The demand for innovation in this space is also linked to the emergence of Smart Cities and the smart water network technologies they require.
Last, a promising trend can be found in the Water-Energy Nexus – the close link between water and energy production projects. With water playing a crucial role in both oil extraction and thermoelectric plant operation, the dwindling water supply produces strong incentives for the energy sector to fund relevant water technology programs.
As the article concludes, “water is on its way to becoming one of the main focus areas of corporate investors in the Clean-Tech space, offering a clear promise for meaningful and profitable investments.”
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Appeared in the issue: Coller Venture Review — 2016 -3 — Deep Innovation Issue