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Mandates needed to spur water tech

Posted by: Maven on March 13, 2009 at 5:55 am

From Red Herring:

Water is a tricky business. Utilities, which supply water and provide wastewater treatment, are typically slow to change, and the industry is laden with regulations. Those are some reasons why water startups attracted only 1 percent of total U.S. clean-tech venture funding in 2008. To drive more investment toward water, the industry should look to its big clean-tech sibling: renewable energy. Solar, wind and other clean energy sources have grown largely because of government mandates requiring their increased use.

The same could happen for water, industry observers say. If national or state governments mandated that water utilities reduced their per capita use or recycled a growing percentage of their water over time, technological solutions would be in higher demand and innovation would flourish.

Mandates would make the business case for startups stronger, and serious investment would start to flow. Much like the energy sector’s renewable portfolio standards that are popping up across the globe, the water world needs mandated targets.

“We look at water tech startups and ask what is the lever to get companies to scale,” said Nancy Pfund, managing partner of San Francisco-based venture firm DBL Investors. “People don’t change behavior unless they have to or if not doing so costs them money. You need an incentive in place.”

Read more from Red Herring by clicking here.

March 13, 2009 · Filed Under Investing in water

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