How MembrIon Cracked the Water Tech Commercialization Code

“Your technology is fascinating, but we rate you 1.5 out of 10.”

Imagine receiving this assessment just after raising a $12.5M Series B round. For most startup founders, such feedback would be devastating. For Greg Newbloom, CEO of water technology company MembrIon, it became the catalyst for a complete reinvention of his business.

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The water industry is notorious for its “pilot purgatory” – that dreaded space where promising technologies go to die, stuck in endless demonstrations without ever reaching meaningful scale. It’s estimated that 95% of water technology startups fail to cross the commercialization valley of death. The reasons seem obvious: conservative customers, long sales cycles, and high capital requirements.

Yet some companies manage to break through. This is the story of how one startup is defying these odds by completely rethinking what it means to bring innovation to the water industry. It’s not a story about breakthrough technology – though MembrIon has that. Instead, it’s a raw, inside look at the painful decisions, strategic pivots, and fundamental transformations required to turn promising technology into a scalable business.

From letting go of early team members who held crucial patents, to abandoning promising market opportunities, to completely reinventing their business model, MembrIon’s journey offers a masterclass in water technology commercialization. Now, with a clear path to $50M in annual recurring revenue, they’re demonstrating that perhaps the water industry isn’t as resistant to innovation as we think – we’ve just been trying to deliver it the wrong way.

When Your Investor Gives You a 1.5/10

When MembrIon secured its $12.5M Series B funding led by PureTerra Ventures, with Samsung Ventures and Lam Research joining the cap table, they thought they were on the right track. Then came the assessment that would reshape their entire trajectory.

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“If you were to look at the potential of the company, 8-9 out of 10. If you were to look at the actions of the company and focus on the right things, it was probably 1.5 out of 10,” recalls Alex Crowell from PureTerra Ventures. This brutally honest evaluation wasn’t about the technology – it was about execution.

The Wake-Up Call: PureTerra’s Brutal Assessment

“I bucket technologies only in three buckets: jewelry, aspirin, or oxygen,” explains Crowell. “This was the pause that we had with MembrIon because at that point they were jewelry. And what we need to ascertain is, can we get them from jewelry through the aspirin phase to oxygen?”

The investment came with strings attached: mandatory participation in the “Rockefeller scaling up” program. As Crowell puts it, “We force feed them the red pill. They have no choice but to see what’s actually there instead of what they wish was there.” This wasn’t just another corporate training – it was a fundamental reassessment of how MembrIon approached commercialization.

Beyond Capital: Why This Series B Came With Mandatory Homework

“The capital that was raised for MembrIon was to position them for growth,” Crowell explains. “To understand the company’s capabilities, to give them 18 to 24 months run, to put people in key positions, and to get the product ready for the client.”

Just 18 months later, that 1.5 out of 10 score has grown to 8.5. As Crowell notes, “The future is still not clear, but there’s a feeling that it’s no longer hope. Hope isn’t the plan.”

Key Takeaways (MembrIon’s Path to Scale)

🎯 Strategic Focus

• Brutal Prioritization: Reduced from 22 initiatives to 5 core priorities
• Market Selection: Chose semiconductor industry for acute pain points and ability to pay
• Clear Target: $50M ARR by 2030, starting from current $1M base

💼 Business Model Innovation

• Shifted from product sales to Water-as-a-Service
• Eliminated capital expenditure barrier for customers
• Added 120-day opt-out clause to reduce customer risk
• Secured asset financing to support service model deployment

👥 Team Evolution

• Core Metric: From 1 water industry expert to 30% of team in 18 months
• Target: 40% water industry experience within 3 years
• Hard Choices: Let go of early technical talent to make room for operational expertise
• Key Addition: Added COO/CFO to strengthen business operations

📈 Scaling Framework

• Current: 1 operator per system
• 2025-2026 Goal: 2 systems per operator
• Long-term Target: 4 systems per operator
• System Evolution: From 30 GPM to 100 GPM units

🚀 Growth Accelerators

1. Direct customer engagement instead of working through integrators
2. Standardization of systems and processes
3. Focus on regulated metals in wastewater
4. Performance guarantees instead of traditional sales
5. Resource recovery value proposition

⚠️ Key Challenges to Watch

• Maintaining company culture through rapid growth
• Recruiting right talent for next phase
• Managing tension between innovation and standardization
• Balancing customization requests with scalability needs

💡 Innovation Approach

• Move from perpetual innovation to effective execution
• Focus on practical improvements over technical perfection
• Standardize core offering while maintaining flexibility
• Build value through resource recovery and circularity

📊 Success Metrics

• Customer adoption without piloting requirement
• Reduction in sales cycle length
• Improved operational efficiency
• Resource recovery rates
• System automation levels

🎯 Exit Strategy Considerations

• Sweet spot: $8-10M ARR for optimal exit timing
• 3-4 year window for potential exit
• Multiple paths: strategic partnership or acquisition
• Focus on annual recurring revenue over one-time sales

🌟 Final Wisdom

“The bigger the vision, the easier it gets” – Greg Newbloom

• Vision must extend beyond technology
• Focus on solving industry-wide challenges
• Build for circularity and sustainability
• Create value beyond water treatment

Breaking the “Build It and They’ll Come” Myth

Why Great Technology Isn’t Enough

MembrIon’s technology consistently exceeded performance expectations in pilots. But they kept hitting the same wall: “If we drop a big check to put this piece of capital equipment in place, how do we guarantee that you are still going to be around in two years?” Greg Newbloom, MembrIon’s CEO, recounts. The answer? They couldn’t – not with their original business model.

The challenge was particularly acute given their starting point: a company originally focused on battery technology, with just one person having any water industry experience. “We were constantly doing things for the first time,” Newbloom admits. But that would change dramatically.

The Risk Nobody Talks About in Water Tech Sales

“It’s really cool to have a tech that does all kinds of wild and wonderful things,” notes Crowell, “but make no mistake in the water and wastewater industry. It’s a slow moving animal. There isn’t one client out there that wakes up at 6 AM, sets his alarm, jumps out of bed, rockets to the office to write a purchase order for a piece of treatment kit.”

Working through channel partners and integrators added layers of complexity and slowed adoption. “We would have to prove it to a channel partner or integrator first, and then they would have to get comfortable enough to put their name on it and prove it to their customer,” Newbloom explains.

How Water-as-a-Service Changes Everything

The solution? Take on the risk themselves. MembrIon set an ambitious goal: within three years, 40% of their team should have outside experience in the water industry. They’re already at 30% eighteen months in – a transformation that has fundamentally changed how they approach the market.

The company shifted to a Water-as-a-Service model, charging per treated gallon with performance guarantees. “When you strip away all those risks and you’re lower cost than what exists, you can move at a very different pace,” says Newbloom. This wasn’t just a pricing change – it was a fundamental shift in how water technology gets to market.

The Power of Saying No to Growth

From “We Can Do Everything” to “We Must Do One Thing Well”

The transformation became tangible at a recent leadership quarterly offsite. “We came in with 22 different priorities on the list,” Newbloom reveals. “We walked out with 12 and a top five. The next seven are the nice-to-haves, and the other ten? Chopped. We’re just not gonna do it.”

This ruthless prioritization wasn’t just about creating a simpler to-do list. As Rachel Malone, one of MembrIon’s early scientists explains, “When we were starting, we were casting a pretty broad net because we just needed to figure out what we could do. I sort of made a list of all the chemical species we’d come across, and this is what happened when we’ve tested it to date.”

Why Semiconductor Wastewater Became the Golden Ticket

The presence of Samsung Ventures on MembrIon’s cap table isn’t coincidental. “We know that MembrIon is treating copper wastewater in the semiconductor industry and Samsung is one of the largest generators of this waste,” Newbloom points out. “MembrIon’s probably on to something if they’re writing a check, right?”

The focus on semiconductor wastewater wasn’t just about market size – it was about finding an industry where the pain point was acute enough to drive adoption. As Joshua Summers notes, “We have a horrible wastewater and what do we do with it? You stick it in a truck, drive it halfway across the country to somewhere that nobody particularly cares about and then you dump it in the ground. Is that the best that we can do?”

The Hidden Value in Toxic Streams

“These are streams that are toxic both for humans and the environment,” Newbloom explains. “They’re challenging to dispose of and correspondingly, their treatment costs are astronomical.” But MembrIon saw beyond the treatment challenge to the recovery opportunity: “You have streams that have copper, nickel, cobalt, things that are really important for the clean energy transition that in many cases are too dilute to be of any value.”

The Hardest Part of Scaling: People

When Your Best People Don’t Fit Anymore

The numbers tell a stark story: three positions wound down, six new positions created. But behind these figures lies a deeper transformation. “The people that departed were very, very skilled. I mean, some of our best people,” Thomas Mitchell, COO/CFO explains. “But for example, two of them were on the infrared camera project, very successful completion of their tasks, but not something that was going to get us where we need to go over the next two years.”

Breaking the News to Patent Holders

“Someone who’s done phenomenal work with the company for years, lots of patents, we would not be here without this person,” Newbloom reveals, describing one of his hardest decisions. “And yet fundamentally that skillset was not one that we would need to rely on moving forward.”

Building Tomorrow’s Team While Managing Today’s Reality

Every three months, Newbloom performs a crucial exercise with his leadership team: “Knowing what I know now, would I enthusiastically rehire this person?” This brutal honesty has shaped a team truly aligned with the company’s direction. As Emily Rabe, who evolved from Director of R&D to Director of Product Development, explains: “It’s not about a brand new membrane chemistry anymore. Now it’s about how we’re integrating this in here, do we have the right control narrative to make sure we’re handling all the variants in the streams correctly?”

Engineering Scale: Beyond the First Win

From Custom Projects to Standard Products

The numbers are impressive: from building maybe one full system when Mitchell joined, to shipping 15 by the end of Q2. “In order to go into a strong growth mode, we need to make sure that we’re not letting perfect get in the way of good enough,” Mitchell emphasizes.

The Path to Operating Multiple Systems per Employee

The roadmap is clear: from today’s one-to-one operator-to-system ratio, to two-to-one by 2025-2026, and ultimately four-to-one beyond that. As Summers explains, this progression isn’t just about numbers: “It moves from Brandon pressing the button on the HMI, to Brandon controlling the system with a laptop next to the system, to Brandon being at a desk two minutes away, to Brandon operating from home, and finally to operating it from Seattle.”

When Process Becomes Your Product

“It’s more about implementing processes and implementing documentation,” Mitchell explains. “When you run into a problem, the first thing to do is you ask, is there a process? And if there’s not, you change that.” This focus on process has led to concrete results. When they started measuring scrap rates in membrane production, they discovered significant waste they hadn’t noticed before. Addressing this has improved both efficiency and margins.

The $50M Roadmap

Metrics That Matter in Water Tech

The numbers tell a compelling growth story: from today’s approximately $1M in annual recurring revenue (ARR) to a targeted $50M by 2030. But as Alex Crowell explains, it’s not just about the final number: “Once it really gets north of 10 million, that’s the golden number that companies become a lot more attractive. Especially on exit value.”

The path to this growth is methodical. The company’s current 30 GPM (gallons per minute) systems will soon be joined by 100 GPM units, opening new markets. As Emily Rabe notes, “A mining company isn’t going to talk to us at 30 GPM. They might not talk to us at 100 GPM, but at least we could do a pilot.”

Why Recurring Revenue Changes Everything

The Water-as-a-Service model has transformed customer acquisition. “Instead of being a module producer, we’d like to be a waters-of-service. That’s really where we think we add the value,” explains Mitchell. The model includes a 120-day customer opt-out clause, demonstrating MembrIon’s confidence in their solution while reducing customer risk.

This approach has led to an unexpected acceleration in sales cycles. “We’re in contracting now on a facility that we didn’t have to pilot at,” Newbloom reveals. “We were able to just do bench scale testing, and with the contract structure, we’re able to say like, look, this is no risk to you.”

The Series C Inflection Point

The company now faces a “good problem” as Newbloom puts it: “We don’t have the bandwidth to do the level of business that is coming through our pipeline.” The solution? A Series C round to fuel expansion. “We’ve got a really great core team, but we don’t have a formal sales leader. I’m not a salesperson. I’m an engineer. I guarantee that there are people that, with our capabilities, could do far better, far faster than I could.”

Exit Scenarios: From Partnership to Acquisition

PureTerra sees a clear window for exit: “Three to four years from now would be a comfortable period,” Crowell states. The sweet spot appears to be when the company reaches $8-10M in annual recurring revenue. “There’s a sweet spot there for VC that you want a company to grow to. Not too small, not too large.”

Beyond Revenue: The Circularity Vision

Turning Waste Streams into Value Streams

“We’re taking what was thought of as a pure waste stream and we’re dividing it into fresh water, recovered metals, and potentially reusable acids,” Mitchell explains. The key differentiator? “We don’t have a green premium. We’re not charging more. You’re actually saving money for your facility. And you’re getting resources back.”

Why Water Tech Needs Bigger Visions

“The bigger the vision, the easier it’s gonna be,” Newbloom advises. “No one wants to bet on a really successful operating company that’s growing at 30 percent year over year. They want to bet on the thing that could change the world.”

This vision has particular resonance in the semiconductor industry, where collaboration on environmental challenges is surprisingly open. “It’s surprising how collaborative that industry is when it’s not talking about chip architecture,” Newbloom notes. “When you get to the wastewater side and they’re like, ‘how are we going to deal with this?’ People are like, ‘well, this is what we’re doing,’ and it’s very open.”

The Future of Industrial Water Management

The company’s approach to brine mining represents the next frontier. As Rachel Malone explains, “I’m a nerd for circular economies. We have all these really valuable, non-renewable resources and minerals, and they end up in water. Within that technical cycle, if we’re thinking about the MacArthur Foundation model, we can be in that picture and help enable that reality.”

The key challenge now? As Thomas Mitchell puts it, “If we look at our ramp rate, we have extremely high confidence with all our employees. Now, if you 10X that number of employees, how do you keep the company culture? How do you keep everything working smoothly?”

The Path Forward: More Than Just Another Success Story

As MembrIon stands at the cusp of their Series C round, their journey from a 1.5/10 company to one poised for $50M in annual recurring revenue offers crucial lessons for the water technology sector. But perhaps the most telling metric isn’t in their financial projections or operational improvements – it’s in their evolving perspective on what success looks like.

Key Lessons for Water Tech Leaders

1. Business Model Innovation Trumps Technology: The shift to Water-as-a-Service didn’t change MembrIon’s technology – it changed how customers could adopt it. As Mitchell notes, “Instead of having a capital expenditure heavy sale, you’re basically saying, ‘I’m partnering with you to get water treated, without having to outlay this capital.'” Sometimes the best way to commercialize breakthrough technology is to package it differently.
2. Focus Requires Sacrifice: From 22 priorities down to 5 essential ones, success came not from doing more, but from doing less. As Newbloom reflects, “If you don’t fully commit to one thing, you can never actually be wrong.” The hardest decisions weren’t about what opportunities to pursue, but which ones to abandon.
3. Team Evolution Is Non-Negotiable: The transformation from one person with water industry experience to 30% of the team in 18 months demonstrates that building a successful company sometimes means parting ways with the people who helped build the technology. As Alex Crowell puts it, “The ability for the leadership team to take care of the stage that they’re in” matters more than past contributions.
4. Standardization Enables Scale: Moving from custom solutions to standardized 30 GPM systems, with 100 GPM units on the horizon, shows that the path from pilot to profit requires standardization. Without this transition, scaling becomes nearly impossible.
5. Take Ownership of Risk: In a risk-averse industry where, as Summers notes, “Nobody got fired for doing the same old thing,” the company that’s willing to shoulder the risk often wins the market.

The Bigger Picture

What makes MembrIon’s story particularly compelling is that it challenges conventional wisdom about water technology commercialization. As Rachel Malone puts it, “Will people want circularity in the right place at the right time to catch us? That’s always such a huge challenge with any sort of starting technology – getting that alignment of the planets.”

Yet MembrIon’s experience suggests that perhaps the water industry isn’t as conservative as we think – it’s just waiting for innovation to be delivered in the right way. Their journey from “jewelry” to “aspirin” to potentially “oxygen” (in Crowell’s classification) demonstrates that with the right approach, even the most conservative industry can embrace change.

A Final Thought

Greg Newbloom’s journey from scientist to CEO mirrors MembrIon’s evolution from technology to business. Both had to adapt, focus, and sometimes make painful changes to succeed. As he puts it: “The bigger the vision, the easier it gets.”

For an industry that often gets stuck in the details of treatment technologies and removal efficiencies, perhaps that’s the most important lesson of all. Sometimes, the key to solving technical challenges isn’t more technology – it’s rethinking how we bring that technology to market.

And as Joshua Summers simply puts it: “How can you not be excited about that? That’s just cool. And also it’s just the right thing to do.”

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This article is based on in-depth interviews with MembrIon’s leadership team and investors during their Series C fundraising phase in Q4 2024. While the company’s journey continues to evolve, their experience offers valuable insights for anyone working to commercialize water technology innovations.

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