Do-Good Capitalist of the Year
WaterHealth International sells water filtration centers to rural villages in India. A village's water supply is piped into a center (about the size of a typical suburban garage), filtered, then subjected to a UV device that knocks out the DNA of the pathogens that cause waterborne disease. Villagers can tap a clean-water tank for about a penny per six liters. The entire process is 6,000 times more energy efficient than boiling water.
The brilliance of this technology, however (it was invented by Ashok Gadgil, an Indian-born physicist who is now WaterHealth's head of scientific affairs), is not why investors have backed WaterHealth to the tune of $22 million. The key to that was a revamped business model courtesy of CEO Tralance Addy.
WaterHealth's early attempts faltered because it tried to sell a device rather than a service, says Addy, who joined the Irvine, California, company in 2004 after his venture firm invested $2 million in it. But Addy, a native of Ghana who had grown up standing in line at the water pump in Accra, knew there was a market for clean water.
Under the new approach, Addy partnered with NGOs to educate villagers about the importance of clean water. He built a network of local professionals to service and maintain the equipment. Then he set up a financing structure so that communities that were able to cobble together a 30 percent to 40 percent down payment for a $65,000 unit could pay off the rest in a loan arranged by WaterHealth. By making clean water affordable to families that earn just $2 a day, the company will soon become profitable.
In late September, the company scored $30 million in loan guarantees from Dow Chemical (also one of its investors); the money will make possible 2,000 more centers over the next couple of years.