Best Industries 2012: Water | 8 Big Opportunities to Tap

Water entrepreneurs are problem solvers who look at global issues like water scarcity and failing infrastructure and see opportunity. Here’s a look at some markets that are ripe for change and the companies that are making that change happen.—Issie Lapowsky

Wastewater, traditionally a cost center for businesses and governments, is now becoming an asset, thanks to smart entrepreneurs who are turning waste into biofuel or renewable energy. Pasteurization Technology Group, a San Leandro-based start-up, uses biogas produced in water treatment to power a turbine that produces renewable energy. That energy can be used on-site or sold to utilities. The exhaust produced from the turbines then pasteurizes the wastewater, purifying it so it can be reused.

The price of water is rising, but it’s still low compared to the other costs farms have to contend with. Still, some businesses are finding opportunities on specialty farms, selling water monitoring tools to help farmers produce higher quality crops. Fruition Sciences of Oakland, California, for instance, makes and installs sensors that measure water levels on grape vines for vineyards. It reduces water costs, and prevents the grapes from being overwatered or dehydrated. Because Fruition’s technology makes for higher quality wine, vintners throughout Napa Valley are willing to pay for it.

The need for water innovation is greatest in the developing world, and while the end user rarely has the ability to pay for the technology, aid organizations and NGOs often do. That’s the market that Puralytics, a Beaverton, Oregon-based start-up, is targeting with the SolarBag. The company, which also makes water purification technology for high-tech laboratories, has developed a three-liter bag, lined with nanotechnology-coated mesh. When exposed to the sun, the bag can purify dirty water in a matter of hours and be reused hundreds of times.

Water efficiency is becoming increasingly important to both utilities companies and eco-conscious consumers. Start-ups like WaterSmart Software, in Tiburon, California, help the two parties communicate. WaterSmart sells a white label software product to utilities companies, which then offer the service to their customers. The WaterSmart dashboard allows homeowners to track their water use online and compare it to the rest of the neighborhood. It also makes suggestions for reducing water use. In May 2011, WaterSmart landed a $900,000 round of funding.

Desalination, the process of removing salt from seawater, has traditionally taken place at massive plants, but companies like Seven Seas Water, which is backed by the Virgin Green Fund, are proving there’s a market for innovative small scale solutions out there, too. The Tampa, Florida-based company builds desalination units on large cargo containers and transports them to private and public customers primarily in the Caribbean, where access to drinkable water is sometimes limited. Modular desalination has also been important in the aftermath of natural disasters, like the earthquake in Haiti.

Consumers are becoming more aware of the contaminants, like nitrates, in drinking water. That leaves a huge opportunity for companies to purify water without the use of chemicals. One such company is HydroNovation, based in San Francisco. It makes residential and commercial water treatment systems that use a chemical-free process called electrodeionization to soften and purify water. In January, HydroNovation landed an investment from 3M New Ventures.

The country’s water infrastructure is old and crumbling. Before cities can replace aging infrastructure, they’ll need the help of technology to detect leaks and weak spots in the system. TaKaDu makes software that connects to sensors in existing water infrastructure. Using information from the sensors, as well as data like maintenance records, TaKaDu can predict where problems are likely to occur. TaKaDu may be a frontrunner in this space, having landed $6 million in funding in April, but it is based in Israel, which leaves room for newcomers in the domestic market.

Read more about the water conservation industry.