Water tech

1. Dipping your toes into the legislative waters

   On the policy side, the jury is still out on whether the EU water framework directive, a policy requiring EU member states to ensure water quality hits minimum requirements, has achieved its objectives, as well as prompting a reduction in pollution and flooding risks.

   Water Europe has called for policymakers to adopt a more holistic ‘Water-Smart’ strategy to avoid a potential global GDP loss of $5.6 trillion due to water-related risks. The organisation thinks that a 56% water demand-supply gap by 2030 can hinder the growth of other sectors such as semiconductors, batteries and hydrogen – sectors that are critical for our net zero goals.

2. Late-stage startups aren’t making it rain in Europe

   As expected, there is a notable contrast across the Atlantic. From 2020 onwards, the US has witnessed 27 Series C+ deals (compared to one in Europe) and 204 deals spanning from Seed to Series B (versus Europe's 277). Consequently, the overall funding figures heavily favour the United States, amounting to $3.6 billion since 2020, whereas Europe has accumulated $1 billion.

   Undoubtedly, the water tech sector is still in its early stages, and the absence of a substantial track record in late-stage deals raises concerns for investors. To propel the scaling of water tech in Europe, a greater influx of private capital into later-stage technology is imperative.

3. Smart water management

   Intelligent water technology is most crucial across three key applications: agriculture, industry and domestic use. Smart water metres enable individuals to track and modulate their water consumption more accurately, while several startups specialising in smart irrigation, effectively diminishing agriculture’s highly intensive water requirements.

   The future of water management is anticipated to heavily involve data analytics. By integrating remote sensing and big data, it becomes possible to mitigate water consumption and waste. Swedish startup Aqua Robur stands out by offering innovative IoT products, with a comprehensive hardware and software solution aimed at optimising water networks.

4. Circle of Life

   Water circularity is expected to prove vital in order for us to avoid a water emergency. Startups that focus on treating by-product wastewater from industrial processes are attracting attention, including Spanish startup Cimico, which secured a €7m seed round in July 2023 to expand its biotech solutions that treat urban and industrial wastewater. As are grey water startups that are extracting and processing water from household sources like baths, dishwashers and dryers. They purify and then recirculate it, effectively reducing domestic water consumption and people’s bills.

Who early stage startups are up against