Companies that desalinate seawater or remediate sewage rarely grab headlines, and water technology startups have typically struggled to attract interest from the venture capital community. Electric-vehicle makers and smart grid companies seem to generate all the buzz. Water is often overlooked within the cleantech industry.
But that's beginning to change. One of the signs: Puralytics, an Oregon startup that uses LED lights to purify water and protect it against bacteria, clinched the Cleantech Open last week. More than 300 companies from regions across the country entered the influential cleantech business competition, and this marks the first time in the contest's five-year history that a "water" company has won.
"I kind of viewed the Cleantech Open as a clean-energy competition, and I didn't really consider it to be a viable opportunity for a water company," said Puralytics founder Mark Owen, 51, a serial entrepreneur who previously worked at Agilent. "Our goal was to be in the finals. I was completely shocked when we won."
Many say that water startups are ripe for investment, in part because the world's water situation is so dire.
The World Health Organization estimates that one in three people globally lacks access to clean drinking water. Population growth and crumbling infrastructure are making sustainably managed water even scarcer, trends grimly underscored by the cholera epidemic that is devastating Haiti. The health and environmental impacts of contaminated water are enormous: WHO notes that wastewater is increasingly used in agricultural production, and that more than 10 percent of the world's population consumes food irrigated by wastewater that can contain chemicals and disease-causing organisms.
In California, health concerns related to water are also on the rise. A "do not drink" order was recently issued in Barstow because some wells were found to be contaminated with perchlorate, a toxic chemical used in rocket fuel, fireworks and munitions. PG&E is offering to buy up houses in the Mojave Desert town of Hinkley, which has struggled for years with groundwater contamination. And state policymakers have long talked about California's "water-energy nexus," because so much energy is spent to pump, treat and transport water to arid Southern California. Water-related energy use consumes about a fifth of the state's electricity.
"We're pleased to see a company in the water space take the Grand Prize," said Rex Northen, executive director of the Cleantech Open. "Water is a massive global challenge. Wars are going to be fought over water."
Puralytics makes two products: a water-purification system designed for buildings and a "SolarBag," a portable bag that uses the power of the sun to purify about three liters of drinking water and could be sold to international aid organizations. The company has just six full-time employees, but since the Cleantech Open gala, held in San Jose Nov. 17, they've been flooded with calls.
"We've had individuals who have decided to invest in us, and VCs scheduling meetings with us," said Owen. "It's very promising."
