Capital for Aquapreneurs

Water has always been one of human life’s most precious commodities, although until this decade it was one often taken for granted. As the planet’s population continues to grow and urban centers grow more dense, more governments around the world are beginning to make it a priority. But are investors?

Over at Red Herring Justin Moresco writes:

Water tech is like the underdog in a sports tournament—everyone cheers it on but few expect it to win. Last year, water tech startups received only 1 percent of total U.S. venture funding, the least of the seven clean tech categories tracked by Dow Jones VentureSource.

With relatively so little money to purse groundbreaking innovation in water, like new filtering technology, entrepreneurs should consider a different tack. The water-tech sector would grow and innovate faster if would-be titans of industry focused more on applying existing technologies rather than developing new ones, industry watchers say.

I imagine if the U.S. venture capital community isn’t investing in water, capital around the world is even more limited. Access to water is such a fundamental human necessity that it’s considered a right by most governments in the world. However, this also means that innovation in the sector rests largely with governments and NGOs. Is there a lack of investment capital for startup for-profits and non-profits interested in innovating in the sector?

One of the more innovative startup initiatives targeting the poor in developing countries was PlayPumps International. PlayPump was a group that essentially turned ‘merry-go-rounds’ into water pumps, allowing kids to remain productive while also playing (something they don’t have time for). Recently PPI contributed all of it’s existing manufactured stock to Water For People. I’m not sure I understand the terms of the negotiations, but to an outsider it looks like an acquisition. In the business world I’m familiar with, acquisitions happen for two reasons: because one group wants something the other has (enough to make an offer) or because the smaller group was looking to ’sell’. So either this was a motivated exit, or one might assume PlayPump decided the other group would possibly be more effective. In full disclosure, my girlfriend works for Water For People (however, I didn’t ask her about the details of this PPI deal).

I don’t actually know which was the case, but I do know that innovations in this space are often under-supported by the private sector which can lead to situations where they turn to nonprofits. One exception is Dean Kamen’s Slingshot, a water purification device that produces over one thousand litres a day. Kamen, the inventor of the infamous Segway, is no stranger to the private sector, holding over 400 U.S. patents and having produced several successful inventions. He’s a great example of what people can do when they actually have access to capital/funding, particularly when it comes to applying that expertise to innovating in areas like water.

The need for high-tech entrepreneurs is, of course, important but so is the need for entrepreneurs like Mohammed Bah Abba and Kamen who are attempting to innovate-away some of humanities more basic problems. An thus, the need to support these ideas is also important. Of course, the counter-argument is the other extreme like the documentary Thirst where the dangers of the privatization of water are revealed. Still, I don’t think the private sectors supporting water innovation, excludes social impact. What do you think?

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Ashoka: Innovators for the Public are hosting Tech 4 Society, a conference exploring technology, invention and social change, in Hyderabad, India, in February 2009. Find out more about the conference here. This blog post is an entry in their competition to find the official blogger to travel to and cover the event.

Photo by Snapr used under the CC