Big Data Technology for Water

The water series continues with a look at two more technology companies that have solutions to avert the looming water crisis.  Even just scanning the earlier posts in this water series, alerts investors to the fact that all the innovators are small, early-stage and privately held.  This makes it a bit difficult for some investors who need the simplicity and liquidity of a publicly traded stock.  That does not mean the next two small, private companies should not be of interest to all investors.  If not as standalone companies innovators of technology filter into the market as acquired operations.  Investors are well served by understanding new technology and how it changes the competitive landscape  -  even if they are not taking a direct stake.

In this post we look at two more companies bringing efficiency to the water industry.

AI for Water Treatment

Pluto AI, Inc. likes is a self-styled ‘problem solver.’  The company’s engineers have developed an intelligent platform for water, wastewater and industrial treatment plants.  The platform uses artificial intelligence algorithms to analyze data from plant computer systems.  It is more than just data from water meters, there are also event logs and SCADA (supervisory control and data acquisition).  Pluto’s system could be characterized as deep machine learning.  Platform users can see all of the plants assets and receive recommendations generated by the system algorithms.  Pluto is currently looking for beta partners to test their intelligent platform. 

In early 2017, Pluto AI raised $2.1 million from a group of venture capital firms, including Refactor Capital, Unshackled Ventures, Comet Labs and Fall Line Capital.  If the company is successful in finding beta partners, more likely than not Pluto will need more capital to move on to the next steps of commercializing and marketing it product.

Big Water Data

There is competition for Pluto AI in the water market in particular.  Based in Israel, TaKaDu is a software developer that wants to take the water industry into ‘the cloud.’  TaKaDu has put together a cloud-based service for water utilities to detect, analyze and manage water leaks, burst pipes or other system issues.  Plenty of other systems do the same, but TaKaDu goes one step further to help utilities prioritize the response for the most savings and revenue.  The company claims its system can reduce water losses by as much as 30% per year and average repair cycles by 60%.  Unitywater just renewed its service contract for another three years beginning August 2017.

There might be something to TaKaDu’s boasts.  It is has customers in several continents.  TaKaDu’s corporate website features several customers that attribute their successes to TaKaDu.  For example, Unitywater in Queensland, Australia credits the TaKaDu solution with helping to stem water losses by identifying leaks.  After a 12-month trial Unitywater deployed the system network wide in July 2014, not only for leaks, but for other types of failures such as telemetry and meter malfunctions.  TaKaDu has caught the attention of some big names in water, including the Veolia Group.  The TaKaDu system has been deployed since October 2016, at Apa Nova Bucharest, Romania’s largest water utility and a member of the Veolia Group.

TaKaDu stands out among the other early stage innovators, but not necessarily for its water system solutions.  The company has raised more money than most  -  $13.9 million and counting.  TaKaDu appears to have advanced to a later stage of market penetration across multiple continents.  That requires an extra round or two to support sophisticated marketing strategies and multiple sales teams.  Venture capital firms with some sophistication of their own signed on the for the most recent financing round in October 2013, including Emerald Technology Ventures, ABB Technology Ventures, Giza Venture Capital and Gemini Israel Ventures.  Representatives of all four firms have been given seats on TaKaDu’s board of directors.  With the considerable influence that board membership offers, these venture firms will most likely be looking for the next good step up in valuation and a chance to harvest returns.  This might mean an initial public offering of common stock or sale to a larger public company.  Either way minority investors can ultimately get involved, even if only indirectly.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.