[cross posted on blog.cleantech.com]
2009 was a record year in deal activity for water despite a drop in total venture dollars. 60 percent of deals went to early-stage rounds while the remaining 40 percent went to later-stage companies.
This surge in early-stage activity is a particularly promising and unique trend in the cleantech industry where later-stage deals rule. Visibility around water scarcity issues is bringing this sector to the forefront.
By some estimates, business-as-usual practices will result in a 40 percent water gap by 2030, necessitating the need for businesses to do more with less. Once again, crisis leads to opportunity.
While improving water productivity presents great opportunity, there are also several challenges ahead in mobilizing capital around water innovation. For one, the price of water does not reflect its scarce nature. Two, holistic water policies and regulatory structures, while emerging, have yet to sufficiently support investments. And three, buyers of water related goods and services have very different needs.
The great news is that several countries are leading the charge with progressive policies that support a focused, private and public investment environment.
Singapore, for example, has an innovative water conservation strategy under its Ministry of Environment and…
Mia Javier is a San Francisco-based analyst for the Cleantech Group.
