innovation & investment in water technologies: a local
TRANSCRIPT
Innovation & Investment in Water Technologies:A Local & Global Perspective
Assaf Barnea, CEO
“Water Innovation”…
It just looks transparent
and simple….
but, there is no such
thing as: “Just Water..”
World largest Desalination plant Sorek & Ashkelon (RO)
World record in waste water reuse (75% of total consumption,
next Spain 12%).
Leading position in Dripping Irrigation systems.
Unique integrated water management system (4 water sources to one system).
Water management & Water security
Unique National carrier project .
4th largest Filtration plant in the world.
Leader in Technology Innovations
Israel- A Global Position & Leadership in the Water Market
A Historical Hub of Innovations & Technologies
Probably the first Exit in Water…
“The prophets in the Bible never accepted the droughts of the Negev and envisioned that one day “water will flow out of the desert and streams from the Arava valley.”
“It is here in the Negev that scientists and researchers are faced with the challenge of transforming sea water into fresh water”..
Ben Gurion: a new perspective on Water and Science
(Sede Boqer 1955)
Innovative Breakthroughs out of Israel
Netafim - Drip irrigation
Given Imaging – Ingestible video camera
Intel’s Centrino and Pentium 4 microprocessors
M System’s Disk on Key and Disk on Chip flash memory
GE Healthcare’s portable cardiac ultrasound system
The Phillips Brilliance CT Scanner
IP Telephony invented by founders of Vocal Tec
AOL Instant Messenger ICQ
Zip compression technology
STATE OF ISRAEL Ministry of Industry Trade and Labor | Foreign Trade Administration
| Investment Promotion Center 8
WaterThe Israeli Experience
The Notional Water Program
Increasing R&D
Activities
Local MarketInnovation
Strengthening
Human
Capital
Penetrating
World
Market
NEWTech Key Elements of The Program
Southern MID-West
California
Death Valley
ArizonaNevada
Israel - the “Beta Site Bridge” for Water Innovations
24 incubators: almost all of them “Privatized”.
Approximately 200 projects are in development stage at
any given time (Bio, Medical, IT, Telecom, Cleantech).
Budget for project: $500K- $1M.
Government support - OCS: 85% of budget
Support duration: 2 – 3 years
Equity split- range of 30%-70%
Total Annual Government Budget $ 45 M
Success stories: Protalix, Compugen, dpharm,
Enzymotec, Sightline, Remon Medical, Aeronautics,
ProActivity, Nidaria, Hydro Industries.
Israel’s Incubators Program- Office of Chief Scientist
The largest water technology seed investor worldwide with a portfolio
of 12 start ups companies.
As of February 2010, owned and operates under Aqua Agro
Cleantech fund in cooperation with the Israeli Chief Scientist. Till
recently, held by the Canadian Stern Group based in Vancouver.
Strategic Partnership with Israel’s national water company Mekorot.
Advisory Board composed from Israel’s best water experts.
Focusing on screening the most promising ideas from Israel’s top
academy, water institutions and private entrepreneurs.
A solid platform for developing and commercializing water
innovations.
Kinrot Ventures-Israel’s Water Incubator- Profile
AquAgro Cleantech & Water Fund
A VC fund investing in mid-to-late stage technology companies in water,renewable energy, electricity demand control, environmental, “smart”agriculture/food;
First exit done , distribution in April 2010 at final closing .
Experienced team with strong VC and sector track record;
Strategic partners in target markets;
Strong advisory board and venture partners;
First closing completed in December 2007
Investments in eight companies already completed
Following the approval of the OCS-a start up is born in the Incubator
Idea
Patent
Technology
Exit towards
an Exit
Initial screening of the Deal flow by the Incubator
R&D of the incubator company towards Beta testing
Kinrot Ventures -A Seed Investment Mechanism
Initial sales, external rounds of Financing
Beta- Alpha- Feasibility
Prof Rafi Semiat - Head of the Grand Water institution Technion.
Prof Avner Adin - Chair of the Adin water Committee
Shimon Tal - Former Water Commissioner .
Ilan Wilf - CEO Atlantium.
Roy Amizur - CEO CTG
Zur Ben David - Founder BlueI technologies.
Yossi Yaacobi– Director, Mekorot WaTech
Elad Frenkel CEO AqWise
Tamar Morag -Reinhold Cohen
Prof Bear-Dean, School of Engineering, Kinneret College
Kinrot Ventures Advisory Board
Aqua Digital- Innovative Digital flow metering
Aquagen-swimming pool application.
Cooltek- on demand cooling tech
Aquarius -online leakages detection system
Kolmir-new ultrasonic filtration tech.
TA count- near real time micro organism detection.
Hydrospin-in pipe energy production.
Diffusair – innovative aeration technology for waste water
SeaTech -production of magnesium from Brine
SPC- sophisticated Pressure control for households*.
Wadis- electric pulse for water disinfection *
Eltav -wireless
solution for valves in
the process industry
PML- laser detection
of particles
Kinrot’s Water & Cleantech Portfolio
Total population(all microbial cells present in tested preparation)
Dead microbes Quantified by microscopy or
cytometry
Live (viable) microbes
Nonculturable Not differentiated using rapid
microscopic, biochemical, molecular methods
•Spores•Anabiotic forms•Microbial cells in shock •Non reproducible mutants•Drug treated microbes•Others
Reproducible (culturable)(the only ones that matter)
Quantified by
•Plate count methodologies
•TACount
As far as we know, No other technology is able to do a plate equivalent test without culture
Kinrot TA Count-a unique rapid microbiology technology
Confidential and Proprietary
Diffusair 2009
Diffusair- Innovative Aeration technology at 50% of the cost
~1.5% of total US electricity
consumption
Aeration accounts for ~50% energy cost
in WWTP
Translated to >3,000 MW at US$1.6
billion per year
Trends: US growing regulations Rest of
the world 3-4 X US with Growing
capacity and regulation requirements
Electricity distribution in WWTP
7% 1%
52%4%
11%
25%
pumping and primary treatment primary settlingaeration secondary settling and RAStertiary treatment sludge treatment
Per US DOE Data -Energy consumed by Waste Water Treatment
Plants (WWTP)
19
Kinrot’s Eltav-Unique Wireless Solution for the Process Industry
• Hundreds of millions of industrial valves,
mostly Not monitored.
• Eltav brings a breakthrough wireless
technology, that provides real time
information directly into the control
process,
reducing failure and risk while increasing
safety and yield.
All, for a fraction of the cost.
Jun-10 You have nothing to lose but your cables…
Total Assets- $ 3 B
$ 600 M revenue
3000 water installations
80% of the total water consumption
WaTech- Entrepreneurship & Partnership Center
Kinrot’s Strategic Partner - Mekorot Israel’s National Water Company
Overcoming the Conservativeness-Establishing a Global Platform
Partnership Agreement
with LA Water Department
Milwaukee Water council
Central Valley Water
incubator in Fresno CA.
Non official
Relationship with:
GE water
Siemens water
Veolia
PUB Singapore
Cleantech VC and PE
World bank
“A Genius is an African who dreams about Snow” Vladimir Nabokov
Promising Entrepreneurs.
Ideas that can transform into technologies.
Strategic Partners.
Potential Investors (Pre and Post incubation).
Beta Site with potential customers.
Innovation is a constant Search !
The “Innovation Trap” or “The Tipping Point” for Cleantech & Water Technological Innovations
Define the level of innovation needed (best of breed?)
R&D… r..R d..D..
Death Valley..
Scalability..
Conservativeness (Reregulation & Buying cycles).
HR clash.. (Innovation champions)
Think Global Act Local ! (True needs & Bottom up approach)
Innovative/adaptive Business models !!
Know the historical value chain..(who is the customer,
service provider, NGO)
Scalability & Techno/Economical Feasibility..
New water
desalination
approach from MIT
and South Korea
could lead to
efficient small,
portable unitsPhoto Patrick Gillooly
Photo: Patrick Gillooly
Innovation meets Infrastructure (Clayton Christensen, Harvard Business Review)
Global Water MarketsAwareness
ConsiderationPreference Execution Loyalty
Creating a “financial comfort zone” for the “innovations meets infrastructure convergence”..
The Challenge of the industry
The Buying Cycle.. & the VC’s current position for water investments…
2004 2006-2010
GlobalWater Market
States
A Strategic move to various Corporate, Funds & States..
Tips… Drops.. Currents..of Investments
BPT (Israel)- raised $12 M from Pitango & US Venture Partners for commercializing advanced
membranes-based separation solutions for water and waste water industries.
Ostara Nutrient Recovery tech (Vancouver) recover resources from Wastewater, raised $10.5
M from Vantagepoint & Foursome (Sep 2008)
BioPetro Clean (Israel), biological WW Treatment) raised $5M from 21Ventures. (Sep 2008)
HaloSource (Seattle)water& antimicrobial tech raised $11.5M from Origo & Unilliver (July
2008)
Canada’s XPV -EnviroTower Inc- cooling tower water treatment tech, Pionetics water
purification systems for residential use
NanoH2O (CA), Nano RO membranes raised $15 M from Aok & Khosla Ventures.
Energy Recovery -- 2007 IPO
A Significant and Growing Market
29Global water intelligence ,GE ,Source: SAM
6-7% 10-12%
Med growth rate segments
(utility, basic infrastructure)
High growthrates segments
(desalination, membrane, security)
:2008-2004growth rates Estimated
7-8%$600-800B
$500-600B
$400-450B
$300B
ElectricPower (E)
Semiconductor
$400B
Cellular WaterIT
$600-650B
Global markets’ sizes comparison:
TelecomEquipment
Pharma
$200-250B
Biotech
$40B
65%
25%
10%
Infrastructure(Construction & management)
• Basic equipment (pumps, pipes)• Construction
• Basic agriculture equipment • Municipal water utility
management
B230-260$B80-100$
B500 $ Water
Technology• Water Treatment
(municipal, industrial)• Desalination and
waste water treatment• Water monitoring and
equipment control• Water security
(2009)
The Global Water Technology Market
Source: Seckler et al, 2002*varies according to definition
Water Shortage Areas
People living under water stress*
1B2004
3B2025
Water Demand Growth Exceeds Population Growth
Depleting Resource – Future Global Water Shortage
…”Show me the Money…”
The Market & Needs
PeopleTechnology & IP
The ROI -Evaluating the Start Up DNA