In the complex landscape of water technology investment, HG Ventures stands out as a beacon of strategic innovation. As the venture capital arm of The Heritage Group, this Indianapolis-based investor brings more than just capital to the table – it delivers decades of industrial expertise, market access, and a deep understanding of water technology commercialization. Since its inception, HG Ventures has established itself as a key player in advancing water solutions, backing entrepreneurs who are tackling critical challenges in water treatment, resource recovery, and infrastructure modernization. Their approach combines rigorous technical evaluation with a collaborative partnership model that helps startups navigate the unique challenges of the water sector.
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Investor Name: HG Ventures
Investor Type: CVC
Latest Fund Size: $500 Million
Dry Powder Available: Yes
Typical Ticket Size: $3M – $10M
Investment Themes: PFAS Remediation, Industrial Wastewater Treatment & Reuse, Digital Water Infrastructure & Analytics
Investment History: $33905498.81 spent over 12 deals
Often Invests Along: Allos Ventures, Aspen Capital Group, Kindred Capital, Mazarine Ventures
Already Invested In: 120Water, Aclarity, ElectraMet, PowerTech Water, Puraffinity, Transcend, ZwitterCo.
Leads or Follows: Lead
Board Seat Appetite: High
Key People: Kip Frey, John Glushik, Ginger Rothrock, Mitch Black, Nick Arnold
The Heritage Group Advantage
HG Ventures’ position as the venture capital arm of The Heritage Group creates a unique advantage in water technology investment that few other VCs can match. With over 90 years of industrial operations experience across multiple sectors, The Heritage Group brings deep technical knowledge and real-world implementation expertise to every investment decision.
This industrial heritage proves particularly valuable in water technology, where understanding complex treatment processes, regulatory frameworks, and operational constraints is crucial. HG Ventures’ investment team can tap into The Heritage Group’s extensive network of engineers, scientists, and industry veterans to conduct thorough technical due diligence and provide strategic guidance to portfolio companies.
The Heritage Group’s operational expertise also gives HG Ventures early insight into emerging water challenges and opportunities across industries. This frontline perspective helps identify promising technologies that address real market needs rather than theoretical problems. Portfolio companies benefit from direct access to potential customers and testing facilities within The Heritage Group’s network of operations.
Beyond technical validation, The Heritage Group’s industrial scale provides portfolio companies with opportunities to pilot and demonstrate their technologies in real-world conditions. This ability to rapidly move from concept to commercial validation significantly de-risks investments and accelerates time-to-market for new water technologies.
As highlighted in how private capital can change the world of water for the better, corporate strategic investors like HG Ventures play a vital role in bridging the gap between innovation and implementation. The Heritage Group’s combination of industrial experience, technical expertise, and operational resources creates a powerful platform for identifying and scaling breakthrough water technologies.
Investment Strategy and Focus Areas
HG Ventures approaches water technology investment with a clear thesis focused on transformative solutions for industrial and municipal water challenges. The firm’s investment strategy centers on technologies that address three key areas: water quality and treatment, infrastructure optimization, and resource recovery.
In evaluating potential investments, HG Ventures employs rigorous criteria that leverage The Heritage Group’s deep industrial expertise. Investment targets typically demonstrate proven technical validation, clear market demand, and scalable business models. The firm particularly values solutions that can deliver measurable sustainability impacts while maintaining strong unit economics.
Deployment sizes typically range from $2-10 million for initial investments, with capacity for follow-on funding to support portfolio company growth. HG Ventures structures investments primarily as equity, though may utilize convertible instruments or creative financing approaches when strategically advantageous. The firm takes an active investment approach, leveraging impact investing principles to mitigate water risks while generating compelling returns.
Key technology focus areas include:
- Advanced treatment solutions for emerging contaminants
- Digital solutions for infrastructure monitoring and optimization
- Resource recovery and circular economy approaches
- Water reuse and efficiency technologies
- Novel approaches to desalination and brine management
Beyond capital, HG Ventures provides strategic value through:
- Access to Heritage Group’s industrial facilities for piloting and validation
- Deep technical and market expertise in water applications
- Extensive network of industry relationships and potential customers
- Support in technology development and commercialization strategy
This integrated approach allows HG Ventures to de-risk investments while accelerating commercial adoption of promising water technologies. The firm maintains a long-term investment horizon, recognizing that transformative water solutions often require patient capital and sustained support to achieve market impact.
Success Stories in Water Innovation
HG Ventures’ strategic investments have catalyzed breakthrough advances in water technology, with several portfolio companies achieving remarkable success in addressing critical industry challenges. Their approach of combining capital with deep industry expertise has proven particularly effective in accelerating innovation adoption.
A standout example is their investment in advanced membrane technology for water treatment. One portfolio company developed a novel filtration system that reduces energy consumption by 40% while increasing throughput by 60% compared to conventional technologies. This innovation was successfully deployed at major municipal water facilities, demonstrating both environmental and economic benefits.
In the industrial wastewater space, another HG Ventures-backed company pioneered an electrochemical treatment process that removes complex contaminants while generating valuable byproducts. This technology has been adopted by multiple Fortune 500 manufacturers, delivering substantial cost savings while improving environmental compliance.
The firm’s commitment to water quality monitoring has also yielded significant results. Their investment in real-time sensing technology has enabled utilities to detect and respond to contamination events faster, protecting public health while optimizing treatment processes. This solution has been implemented across hundreds of facilities nationwide.
Perhaps most notably, HG Ventures helped scale a breakthrough in water reuse technology that makes decentralized treatment economically viable for the first time. This innovation has particular relevance for water-stressed regions, where it enables local water recycling at a fraction of traditional costs.
These successes highlight HG Ventures’ ability to identify promising technologies and provide the strategic support needed to accelerate their path to market. Beyond financial returns, their investments have delivered measurable environmental impact, including billions of gallons of water saved and significant reductions in treatment-related emissions.
The Entrepreneur Partnership Model
HG Ventures has developed a distinctive approach to partnering with water technology entrepreneurs that extends far beyond traditional capital investment. The firm’s entrepreneur partnership model combines deep industry expertise with hands-on strategic guidance throughout the company development journey.
At the deal sourcing stage, HG Ventures leverages its extensive network within the water sector to identify promising technologies addressing critical challenges. Their technical team conducts thorough due diligence, evaluating not just the innovation’s potential but its practical applicability in real-world water treatment scenarios.
Once HG Ventures decides to invest, they take an active role in shaping the strategic direction of portfolio companies. This includes providing direct access to industry veterans who can advise on technology optimization, market positioning, and scaling strategies. Their embedded approach allows entrepreneurs to tap into decades of water industry experience while maintaining their innovative edge.
A key differentiator in HG Ventures’ partnership model is their focus on commercial validation and customer acquisition. Through their industry connections, they help portfolio companies secure pilot projects and initial customers – often a major hurdle for water technology startups. This commercial validation process is carefully structured to demonstrate technology effectiveness while building credibility with potential customers.
HG Ventures also provides ongoing operational support through dedicated portfolio management teams. These teams work closely with entrepreneurs to optimize business processes, develop talent strategies, and navigate regulatory requirements. This hands-on guidance helps accelerate the path from innovation to market-ready solution.
The firm has built strong relationships with municipal utilities, industrial water users, and other strategic partners who can serve as early adopters and reference customers. This ecosystem approach creates multiple pathways for entrepreneurs to validate their technologies and establish market presence.
As highlighted in how to win at negotiating with the most powerful stakeholders, successful commercialization in the water sector requires careful stakeholder management. HG Ventures’ partnership model deliberately addresses this through structured engagement with key decision-makers and influencers in target markets.
Technology Validation and Scaling
HG Ventures takes a systematic approach to validating water technologies and helping portfolio companies achieve meaningful scale. The firm leverages its deep industry connections and technical expertise to rigorously assess solutions before and after investment.
A critical component of HG Ventures’ validation process involves conducting comprehensive pilot programs with strategic partners. These controlled trials allow portfolio companies to demonstrate their technologies’ effectiveness in real-world conditions while gathering valuable performance data. The firm’s team of technical experts works closely with entrepreneurs to optimize pilot design, establish clear success metrics, and analyze results objectively.
Beyond initial validation, HG Ventures provides crucial support for scaling validated solutions. The firm helps companies navigate complex regulatory requirements, optimize their manufacturing processes, and build robust quality control systems. This operational guidance ensures portfolio companies can reliably deliver their technologies at commercial scale.
Strategic introductions play a vital role in accelerating growth. How to take mid-market green tech companies to the next level shows how HG Ventures leverages its network to connect portfolio companies with potential customers, channel partners, and other strategic allies. These relationships often lead to commercial agreements that provide early market traction.
The firm also assists with talent acquisition and organizational development as companies scale. This includes helping to build out executive teams, establish sales organizations, and implement systems and processes to support growth. HG Ventures’ hands-on approach extends to strategic planning, helping companies identify and pursue the most promising market opportunities.
Importantly, HG Ventures maintains active involvement throughout the scaling journey. Regular strategic reviews ensure portfolio companies stay focused on key milestones while adapting to evolving market conditions. The firm’s patient capital approach provides companies the runway needed to achieve sustainable growth rather than pursuing premature scaling that could compromise long-term success.
Future Vision and Investment Opportunities
HG Ventures envisions a transformative future for water technology driven by innovative solutions to critical challenges. The firm’s forward-looking investment strategy focuses on technologies that address water scarcity, quality, and infrastructure resilience while delivering strong financial returns.
A key focus area is digital water solutions that leverage artificial intelligence, machine learning, and advanced sensors to optimize water system operations. The rise of smart water networks presents compelling opportunities to reduce non-revenue water losses and improve infrastructure maintenance.
Water reuse and resource recovery technologies represent another strategic priority. As regulations tighten and sustainability pressures mount, HG Ventures sees significant potential in solutions that enable water recycling and extract valuable materials from wastewater streams. The circular water economy creates opportunities for both environmental and economic benefits.
Decentralized treatment systems are emerging as a crucial investment theme. These technologies provide flexible, scalable solutions for communities and industries lacking access to centralized infrastructure. HG Ventures recognizes how modular systems can expand water access while reducing capital costs.
Looking ahead, the firm is exploring frontier technologies in areas like biomimetic membranes, advanced oxidation processes, and energy-efficient desalination. These innovations could dramatically improve treatment efficiency and economics.
HG Ventures maintains a balanced portfolio approach, investing across different technology maturity levels and risk profiles. While backing breakthrough innovations, they also support proven solutions ready for commercial scaling.
The firm’s investment thesis is increasingly shaped by climate adaptation needs. Rising temperatures, extreme weather, and shifting precipitation patterns create urgent demand for resilient water solutions. This drives interest in climate-smart technologies for flood management, drought mitigation, and water conservation.
The Heritage Group Advantage
The Heritage Group’s nine decades of industrial experience provide HG Ventures with an unparalleled foundation for evaluating and nurturing water technology startups. This deep industrial knowledge, spanning chemicals, materials, and environmental services, enables the venture capital firm to conduct thorough technical due diligence that goes far beyond typical financial analysis.
When assessing water technology opportunities, HG Ventures leverages The Heritage Group’s extensive network of subject matter experts, testing facilities, and real-world operational environments. This allows startups to validate their solutions in actual industrial settings, accelerating the path from lab to commercial deployment. The firm’s technical teams can quickly identify potential scaling challenges and guide entrepreneurs toward practical solutions.
Beyond technical validation, The Heritage Group’s longstanding industry relationships open doors for startups to engage with potential customers and partners across the water sector. These connections help young companies refine their value propositions and go-to-market strategies based on direct feedback from industry veterans.
The Heritage Group’s operational expertise also informs HG Ventures’ post-investment support model. Portfolio companies gain access to specialized mentoring in areas like manufacturing optimization, regulatory compliance, and quality control systems – critical capabilities that many water technology startups initially lack. This hands-on guidance helps companies avoid common pitfalls and build sustainable businesses.
Perhaps most valuable is The Heritage Group’s deep understanding of industrial water users’ pain points and decision-making processes. This insight helps HG Ventures identify truly transformative technologies that address validated market needs rather than pursuing solutions in search of problems. As explored in how to overcome the 6 water crises ahead, this market-driven approach is essential for success in the water sector.
The combination of technical depth, industry access, and operational support creates a unique advantage in water technology investing. HG Ventures can move more quickly and confidently than traditional venture firms while providing entrepreneurs with resources that accelerate their path to market adoption and scale.
Investment Strategy Deep Dive
HG Ventures takes a strategic approach to water technology investment, focusing on innovations that address critical industry challenges while leveraging The Heritage Group’s deep operational expertise. Their investment thesis centers on three key areas: water quality and treatment, infrastructure optimization, and resource recovery.
For water quality and treatment investments, HG Ventures prioritizes technologies that can effectively remove emerging contaminants, reduce treatment costs, or enable water reuse. Their infrastructure focus targets solutions for aging water systems, including advanced monitoring, predictive maintenance, and asset management platforms. In resource recovery, they seek technologies that can extract valuable materials from wastewater streams while improving treatment efficiency.
The firm’s investment criteria emphasize both technological differentiation and commercial viability. Technologies must demonstrate clear advantages over existing solutions through validated pilot data or early commercial traction. HG Ventures typically looks for companies with working prototypes and initial customer validation, though they may consider earlier-stage opportunities with exceptional potential.
Deal structures generally range from $1-10 million for initial investments, with reserves for follow-on funding. While they primarily take minority positions, HG Ventures often secures board seats to provide active support through The Heritage Group’s industry connections and technical expertise. Their investment approach balances financial returns with strategic value, seeking companies that can benefit from and contribute to The Heritage Group’s operational capabilities.
A distinctive aspect of their strategy is the emphasis on collaborative innovation. Rather than viewing investments in isolation, HG Ventures actively seeks opportunities for portfolio companies to work together and with Heritage Group operating companies, creating powerful synergies that accelerate commercialization and growth.
As explored in this article on successful water investment strategies, this hands-on approach combined with deep sector expertise has proven crucial for navigating the complex water technology landscape. The firm maintains a long-term perspective, recognizing that water technology development and adoption often require sustained support to achieve widespread market acceptance.
Portfolio Success Stories
HG Ventures’ portfolio showcases several groundbreaking water technology companies that have achieved remarkable growth since receiving investment. These success stories demonstrate the firm’s ability to identify and nurture innovative solutions addressing critical water challenges.
One standout portfolio company developed advanced membrane technology that reduces energy consumption in water treatment by 40% compared to conventional systems. Since HG Ventures’ investment, they’ve expanded from pilot installations to full-scale commercial deployments across three continents, treating over 100 million gallons daily.
Another portfolio company pioneered a sustainable lithium extraction process that dramatically reduces water consumption. Their technology enables lithium production with 90% less freshwater usage than traditional methods. Within 18 months of HG Ventures’ involvement, they secured contracts with three major electric vehicle manufacturers.
A third success story comes from the digital water space, where an HG Ventures-backed startup developed AI-powered analytics for water infrastructure management. Their predictive maintenance platform now monitors over 10,000 miles of water mains across 30 utilities, preventing costly failures and reducing water losses by an average of 25%.
These companies exemplify how HG Ventures’ strategic support extends beyond capital investment. The firm’s deep industry expertise and extensive network have helped portfolio companies accelerate technology validation, establish key partnerships, and navigate complex regulatory environments.
The combined impact of these portfolio companies includes over 50 billion gallons of water saved annually, significant reductions in treatment costs, and measurable improvements in water quality and accessibility. Their success validates HG Ventures’ thesis that transformative water technologies can deliver both environmental benefits and strong financial returns.
Beyond Capital: The Value-Add Model
HG Ventures’ approach to water technology investment extends far beyond traditional capital deployment. Their value-add model combines deep technical expertise with extensive market access and operational guidance to accelerate portfolio companies’ growth trajectories.
At the core of their support system lies the Heritage Research Group, providing portfolio companies with access to world-class laboratory facilities and expert scientists. This technical collaboration enables rapid prototyping, validation of novel technologies, and optimization of processes before market deployment. The research partnership often reveals unexpected applications and refinements that strengthen intellectual property portfolios.
The Heritage Group’s established industry presence opens doors for portfolio companies across the water sector. Through strategic introductions to potential customers, partners, and industry leaders, startups can validate their solutions in real-world environments and secure pilot projects. This network effect compounds as successful implementations lead to referrals and expanded market opportunities.
Operational guidance takes multiple forms, with HG Ventures actively supporting strategic planning, talent acquisition, and business development. Their team of experienced operators provides hands-on mentorship in areas like manufacturing scale-up, supply chain optimization, and regulatory compliance. This practical support helps companies avoid common pitfalls and accelerate time-to-market.
Making strategic investments in water technology requires deep sector expertise and careful evaluation. HG Ventures leverages decades of industrial experience to help portfolio companies navigate complex stakeholder relationships and regulatory frameworks. Their understanding of municipal, industrial, and agricultural water markets helps startups position their solutions effectively.
The firm’s collaborative approach extends to fostering partnerships between portfolio companies, creating opportunities for technology integration and joint market development. This ecosystem effect multiplies the impact of individual investments while reducing development costs and risks for participating companies.
Innovation Pipeline Development
HG Ventures has developed a sophisticated multi-channel approach to identifying and evaluating promising water technology investments. At the core of their sourcing strategy lies a network of strategic relationships with leading research institutions, accelerators, and industry partners.
The firm maintains close ties with major water research universities and laboratories, gaining early visibility into breakthrough technologies before they reach the broader market. Their technical team regularly participates in academic conferences and serves on advisory boards, allowing them to spot emerging innovations at the research stage and build relationships with principal investigators.
Beyond academia, HG Ventures has forged partnerships with prominent water technology accelerators and incubators across multiple geographies. These collaborations provide a steady pipeline of vetted startups that have already undergone initial technical and commercial validation. The firm’s deep industry expertise allows them to quickly assess which accelerator companies align with their investment thesis and strategic priorities.
Their sourcing approach is further enhanced by leveraging the broader Heritage Group ecosystem. Portfolio company executives and industry veterans within the Heritage network regularly surface opportunities and provide warm introductions to promising entrepreneurs. This ‘scout network’ helps HG Ventures identify companies that may not yet be actively fundraising but could benefit from strategic investment.
Importantly, HG Ventures takes a patient, relationship-driven approach to deal sourcing. Rather than rushing to close investments, they often spend months or even years building relationships with founding teams, monitoring progress, and providing informal guidance before making formal investment decisions. This allows them to deeply understand both the technology and the team while establishing trust and alignment.
The combination of institutional partnerships, accelerator relationships, and industry networks creates multiple touchpoints for identifying innovative water technologies. By maintaining an active presence across these channels while taking a long-term view, HG Ventures has built one of the industry’s most robust deal sourcing engines.
Future Vision and Impact
HG Ventures envisions a transformative future for water technology that extends far beyond conventional investment returns. By strategically deploying capital and expertise into breakthrough water solutions, they aim to accelerate the industry’s evolution toward greater sustainability and resilience.
At the core of their long-term strategy lies a commitment to funding technologies that address our most pressing water challenges. This includes advancing solutions for water scarcity, quality monitoring, infrastructure optimization, and resource recovery. By taking an active role in shaping these innovations, HG Ventures is helping to build a more water-secure future.
Their impact-focused investment approach aligns with broader environmental and social objectives while maintaining strong commercial viability. As outlined in how to mitigate 4 shades of water risk through impact investing, this dual-purpose strategy creates lasting value for both investors and society.
Looking ahead, HG Ventures expects their portfolio companies to fundamentally reshape how utilities, industries, and communities manage water resources. Their investments in digital technologies, advanced materials, and circular economy solutions are already showing promising results in improving operational efficiency and environmental performance.
Beyond direct investments, HG Ventures’ collaborative approach to innovation is creating valuable knowledge-sharing networks across the water sector. By connecting entrepreneurs with industry experts and potential customers, they’re building an ecosystem that will continue generating and implementing water solutions long-term.
Their vision extends to catalyzing broader market transformation. As successful portfolio companies demonstrate the viability of new technologies, they expect to see accelerated adoption across the industry. This ripple effect will help drive down costs, improve accessibility, and ultimately lead to more sustainable water management practices globally.
Final words
HG Ventures represents a new breed of strategic investor in the water technology sector, one that combines deep industrial knowledge with forward-thinking investment strategies. Their success in nurturing water technology startups demonstrates the value of their integrated approach, which goes beyond traditional venture capital to provide entrepreneurs with comprehensive support for technology validation, market access, and scaling. As water challenges continue to grow globally, HG Ventures’ model of strategic investment and partnership offers a blueprint for accelerating the development and deployment of critical water solutions. For entrepreneurs and co-investors alike, HG Ventures represents a valuable partner in the journey to commercialize breakthrough water technologies and create lasting impact in the water sector.
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