Efficiency for Drinkable Water

In the current article series that began in the previous week with “A Taste of Water” a case was made for investing in products and services that address water shortage problems.  Water is a vital input for a whole host of companies.  As clean water becomes more difficult and more expensive to acquire, costs of production and final products will escalate.  In some places inadequate water supplies civil unrest can be expected in addition to loss of economic output.

We continue with companies engaged in interesting development for water supply and quality solutions.

Customer Intelligence

Even software companies can get in the water business.  WaterSmart Software has developed a data analytics platform for water utilities.  The idea is to reduce costs of operation so that water utilities can use the savings to invest in water resources.  WaterSmart offers a self-service solution for customer services.  The platform features functions for leak alerts and water usage reports as well as opt-in alerts and notifications.  The water usage reports even provide customers with details on water use within the home as well as tips on how to conserve water.  Importantly, the platform enables electronic payments.

The WaterSmart software package is not limited to the customer.  There is also a dashboard for utility staff to engage in marketing and customer relationship management.  The utility can segment customer groups and send out targeted customer communications aimed at water conservation.

In business since 2009, WaterSmart claims its platform is deployed in more than 50 communities.  The most recent installation announcement came in May 2017.  The South Staffs Water utility in Staffordshire, England is using the platform for to increase water efficiency through greater involvement in planning and regulating water usage.  An added benefit is better customer satisfaction.  South Staffs Water provides drinking water to about 1.3 million consumers and 36,000 businesses, supplying over 87.2 million gallons of water per day. 

Earlier in the year WaterSmart Software also gained interest from the Board of Water Supply in Honolulu, Hawaii.  A pilot project has been set up with funding from a local accelerator.  The effort comes on the heels of an aggressive effort in Hawaii to meet clean energy goals.  After some time at the task, the Board determined additional technology would be necessary.  WaterSmart has been given a chance to demonstrate whether its software platform can deliver the results needed for Hawaii’s efficiency program.

Investors include a Who’s Who of venture elite, including The Westly Group, Physic Ventures, Aspara Capital, LLP, the Menlo Incubator and Sand Hill Angels.  Count on these folks to be scanning the horizon for a harvesting event.  In the meantime a Series B round might be a possibility for investors who want a ‘taste’ of water efficiency.

Intelligence Behind the Scenes

There is more to a water data than just customer water wages.  There is plenty of other data collected by water utility computer systems.  However, conventional water utility computer systems are focused on measuring just one thing  -  water usage  -  and then sending a bill to customers.  Valor Water Analytics has developed an automated meter asset system that allows water utilities to mine additional system data for decision making.  For example, Valor’s system can identify inaccurate water meters and then prioritize replacement by revenue impact. 

In September 2017, the New York City Department of Environmental Protection engaged Valor Water to manage over 800, 000 meters.  The Big Apple water folks are worried about meter decay, theft and broken meters.  Valor’s system tracks and resolves water meter issues. 

Valor Water has several other solutions in its portfolio.  The Valor Cutoff Analyzer reviews non-paying customers to determine if a cutoff is necessary before the utility incurs the expense of discontinuing services.  To reduce the typical water losses that plague all water utilities, Valor deploys its Hidden Revenue Locator, which relies on more data analysis and some fancy algorithms to locate where water meters are failing to accurately measure and bill for water usage.  Valor even has a customer service solution called S.M.A.R.T. Targets for Conservation that allows water utilities to segments and target consumers for water conservation campaigns.  A digital communication feature of the S.M.A.R.T. solution enables relevant messaging to be sent to the right customers.

Valor Water Analytics has raised a total of $2.8 million, beginning with a seed round in late 2014 when undisclosed angels put $240,000 into Valor’s bank account.  The most recent investment round in June 2016, attracted five different early stage investors, including Shore Ventures as the lead investor, Apsara Capital, Synygy, and four others.  Valor has managed to gain a few customers, but capturing a meaningful market share will take additional effort.  More working capital will likely be needed and that could provide additional investors a chance to get a ‘taste’ of Valor.

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.