How to take Mid-Market Green Tech Companies to the Next Level?

Our World is facing new water challenges that will be hard to solve with old solutions only. This means that helping new entrants and mid-market green tech companies to thrive is also the best segway to putting their impact on steroids!

But navigating the jungle of finance, investment, regulations, institutions, and existing business canvas can be tough. Yet no one ever said you couldn’t get some help, as we’ll explore:

with 🎙️ James Rees – Chief Impact Officer at Botanical Water Technologies and Board Advisor at Bluerloop, Droople, and Noverram.

💧 Botanical Water Technologies strives to positively impact water scarcity by providing a new source of drinkable, sustainable, plant-based water for social and environmental projects.

This episode is part of my Series on the Water Crisis in America

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What we covered:

💧 How it might be time to think a bit laterally about water and get creative.

👴 How growing and developing new water technologies can be tricky yet might be desperately needed

🚱 How an external advisor can help a typical mid-market green tech company to overcome challenges and pitfalls and break the glass ceiling

🇺🇸 How capital still needs to be educated about water and how that actually happens.

🌊 How the ones with the money sometimes struggle to find out where to allocate it, while the entrepreneurs flounder to connect with that flow of ESG funding.

😊 How you have to be in water entrepreneurship for the right reasons and how that relates to a long-term vision.

🔥 … and of course, we concluded with the 𝙧𝙖𝙥𝙞𝙙 𝙛𝙞𝙧𝙚 𝙦𝙪𝙚𝙨𝙩𝙞𝙤𝙣𝙨 🔥

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Resources:

➡️ Send your warm regards to James on LinkedIn;

➡️ Visit Botanical Water’s Website

➡️ A big THANK YOU to Sciens Water for enabling this episode!

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Teaser 1: We need advocates from all over the place to help solve Water Challenges

Teaser 2: Do politicians have the right incentive to “Do Good” in the Water Sector?

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Full Video: My conversation with James Rees

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Full Transcript:

These are computer-generated, so expect some typos 🙂

Antoine Walter: Hi James, welcome to the show!

James Rees: Thank you. Pleasure to be here.

Antoine Walter: Let me start with a pretty open question, which has a lot to do with the title of the conference. What is it that we have to rethink in water?

James Rees: The water sector, in general, is evolving. Historically, it’s been focused on big infrastructure and the thinking around that.

With the evolution of technology, the fourth industrial revolution, IoT, digital twins, from my perspective, I think the evolution of water assets has to evolve into more of a digital framework.

So for me, I think it’s more around embracing new technology and how we can actually apply that to traditional infrastructure.

This morning we heard from various people, both from the corporate side, private equity, and also the government, on how we’re gonna spend money that has been allocated. How that money doesn’t breach the gap that should be allocated and the amount of money that we’ll need to spend to get systems working.

I guess my question to those people is, should we do what we’ve done in the past, or should we think a little laterally? And I think that frames the context of rethinking about water.

It might be time to think laterally about Water

Antoine Walter: So, what’s your answer to that question?

James Rees: There are many solutions, many answers, and it depends where you are. I mean, water is a global issue, but where we differ from other environmental issues, like carbon, water is very regional.

So I think you have to look region by region within the US it’s county by county, you know, understanding who the people are, understanding some of the issues that they have.

So whether it’s access, quality, contamination. Aging infrastructure, Decentralized versus centralized. It depends case by case. That may not answer your question, but I think it’s a complicated topic and that’s probably why events like this are so important.

Cuz we have the meeting of the minds, people from government, people from corporate that may have opposing views.

We may meet in the middle, but they’re good ideas that need to be talked about.

Helping Water Entrepreneurs to navigate their way in Water’s New Normal

Antoine Walter: So what’s your role in all of that?

James Rees: I just listened to the Sciens guys and the CEO stood up and said, 10 years ago I wasn’t in water.

That’s probably me as well. So my background is around management, consulting and investment banking.

During my investment banking, I started focusing on green infrastructure. So I think it used to be called green. Now it’s called climate tech or climate infrastructure. That would’ve been 10 or 15 years ago.

Hence by the accent, you might have noticed that I was born in Australia. Australia is a very, water scarce country. And I always remember when I was growing up, whenever we had a shower, we had to shower with a bucket to catch the water and use that bucket of water to then water the plants and the garden.

So this is the upbringing that I’ve had. So when I was in investment banking and I started leaning towards green infrastructure, I was very intrigued with the water market.

It was evolving, but particularly new technologies around water. So around 10 years ago, I started consulting by myself, created a firm and joined up with, fairly innovative consultants and helping green tech or climate tech and water companies think strategically on how they can grow and also think strategically on how they can capture capital from private sources.

New Water Technologies for new challenges

Antoine Walter: I do get why new technologies are cool, don’t get me wrong, but why do we need them?

James Rees: I think it goes back to that saying of if you always do what you’ve done, do you get a better result? And I think the answer within the water sector is no.

I remember 25 years ago when I started working. For some of my clients, particularly in the Asia Pacific region, we used to develop five-year forecasts for them so they could ascertain and understand the externalities and understand the macro drivers to the extent that with a certain level of certainty, they would understand where there would be in four or five years.

You think about the evolution of technology Y2K, and even up to now, companies aren’t focused on that five year forecast.

They can only really see 12 months into the future, if that. And why? Because the externalities are changing so quickly.

So within the technology environment, you know, Moore’s law, so the evolution of super computing, for example, climate, we still talk about a thousand year event, and now we’re talking about a hundred year event, and now we’re just talking about the new normal.

So I think with all that, because we are evolving so quickly, we can’t rely upon traditional technology or traditional systems, we need to embrace the new technology we have. Because what that will do is allow us to be more adaptive to what we have to face in the future.

What do new young water companies need from a consultant or board advisor?

Antoine Walter: And why would one of these young companies, new technology, having a solution to an existing proven problem out there in the water industry, why would they need you?

James Rees: Why would they need me?

Antoine Walter: I’m not trying to push you into the corner at all, I promise!

James Rees: Absolutely. Look, I think, what they need is people like me, people like you. First of all, the people acknowledge there’s a problem and the people who are thinking differently around provid ing an alternative solution to those problems.

One of the topics at this event was the knowledge gap or the talent gap that we have within the water sector is significant. So 10 years ago it used to be people in coveralls with a wrench.

I’m simplifying it, but you know, turning the machinery, a lot of those people have retired. A lot of those people have moved away from the sector and we’re struggling to attract new talent.

And I think the way that we can do that is actually embracing new technology that’s coming through. So we need advocates, people like me, people like you, venture capital, even government. We heard from the epa. and from FEMA today saying: Yeah, we need people coming out of university. We need new talent with new ideas to help solve this.

So I think it’s just not me. It’s people like me, people like you helping out a big issue in a big sector.

There is still a knowledge gap around Private Capital when it comes to Water

Antoine Walter: So you have newcomers, I mean, new ideas, new technologies and they might need to translate to the outer word so that they get adopted faster.

Do I translate that about right?

James Rees: Yes. And look, I think one observation I would make is that there is also a knowledge gap or educational gap around private capital.

In the market around water itself and also technology or new ideas pertaining to water. Part of my role, I help innovative entrepreneurial companies position themselves strategically, but also for capital and talk to various financial institutions, venture capital, private equity, family officers around the sector.

And generally some of those first meetings that you have, it’s more around, well, what are the issues in water? You know, what are we really facing and what do we need to do about it? So I think that there needs to be a focus on people who are already in the sector.

So very specialized water technology companies or investment firms, educating their peers and educating their cohorts.

So Sciens is doing an amazing job here. We just heard it took them eight years of intellectual capital to get to the point where they validated their thematic. They probably have a slight onus on themselves to bring along everyone else along the ride as well. So talking to the pension funds, talking to other financial investors around water so we can all participate.

Impact Investment and ESG Finance need help to connect the dots

Antoine Walter: I’m a total muggle, so pardon me if I’m approximative, but if I’m right, there’s about 35% of the world’s finance, which is about ESG. So I would expect that ESG money to be looking for the suitable projects.

But when I’m discussing with investors or with people trying to put together a portfolio, what they tell me is that it’s hard for that money to find the right target.

So it sounds like a double-sided pain. On one end, you have project holders which struggle to find the right financing to support their projects. And on the other hand, you have that money, which is looking to finance the right projects, but doesn’t really understand those.

So again, if I get it right, you’re bringing those two worlds together and you’re trying to bridge that gap?

James Rees: Consultants within the sector, you know, part of their role is to educate the holders of capital and the seekers of capital, and try and match those together.

Antoine Walter: So it really is a two-sided market.

… while Water Entrepreneurs need to learn to work with these new players

James Rees: Yeah. Two sides. So bring two sides closer together in the middle. I think that the holders of capital, the private equity venture capital government if they have a strategy of allocating capital for ESG.

They’re considering what they define as esg. They’re a little risk averse because they wanna make sure that it truly is ESG.

And we’ve seen in the press around greenwashing, et cetera. We’ve also seen the SEC, coming out and saying that any environmental disclosures will have the same burden of proof, similar to financial.

So if we think about Sarbanes Oxley and the reputational risk and the personal risk that CFOs CEOs have had, that’s where we’re heading with ESG.

So I think that also, slows down the allocation of capital. And then you have a look on the other side. The company’s positioning themselves around ESG, very focused on what they’re doing in the business.

They also now have to wear another hat. Attracting capital and now have to wear another hat about articulating what they’re actually doing. What’s the SDG benefit or what’s the impact benefit that that firm’s having?

So it’s quite complex and I think that takes a period of time to evolve both of the propositions so those players can meet in the middle.

How to Generate a Long-Term Impact

Antoine Walter: Talking about that period of time, That leads me to my crystal ball question. If you’re looking into a, let’s say five or 10 years, what will tell you that we’ve been rethinking water the right way?

James Rees: That’s a fantastic question! Once again, I think, it’s certainly regional. Within the US I think the big statistic that scares me is the number of people that don’t have access to clean drinking water.

We’ve heard today that some of those issues that have created have been political. Politicians are doing an amazing job, but you know, politicians are similar to CEOs. They’re only appointed for a short period of time. So with that in mind, do they make the investment appropriately to get the return, particularly if it’s in a pipe that no one can see?

I think something around that has to change, around fines and persecutions. We don’t want industry to slow down and we don’t want the industry to be scared of making a front step forward, but we need to penalize those that are doing it in a reckless manner. So a reckless manner is not thinking about the community or the people that they serve.

I’m fairly passionate about, ensuring that every person has access to water. I think it’s our human rights. New York came out I think a year or two ago and said water is a human right. California has followed suit. The UN certainly has, embraced that as well. What we want to see is more people having access to clean drinking water, not only here, but also in other regions as well.

Rapid Fire Questions

Antoine Walter: I have to be cautious of your time at some point as well, so to round up these interviews, I have a, just a series of short, rapid-fire questions. So I have two for you. My first would be what is the most exciting project you’ve been working on and why?

James Rees: Can I talk about, two projects?

Antoine Walter: Yeah, sure.

James Rees: Let me talk about two projects. The first is with a company called Botanical Water Technologies. An Australian-based business that has been around for, six or seven years. They have patented technology to harvest water from fruit and vegetable processes. Filter that water to create potable great water.

Now, the benefit there is that, the company itself uses a platform to identify processes in high water scarce areas.

So if we take a tomato process, or a tomato similar to all fruit and vegetables is 90% water. If Heinz says, Mr. Tomato processor, I need some tomato ketchup, they condensate all the tomatoes and that water is, discharged.

Now, some processes will do that in an environmentally friendly way. Other processes won’t. Right.

So this company captures that evaporative condensate and filters it. Now the benefit is that one unit can harvest 20,000 liters an hour. So nearly half a million liters a day. That’s 160,000 I think, gallons. So the abundance of water that is naturally within the processing can be used for replenishment so you can actually use it.

Aquifer or ground water reinjection, it can be used as a sustainable source of water. So instead of taking water from an aquifer, you can actually use it as a circular drinking beverage.

And the third thing, getting back to where we wanna see the world in five years, is you can actually allocate that water to disadvantaged communities who don’t actually have access to water.

So in a flint scenario, instead of using bottled water, You could actually haul sustainable fresh drinking water, in tanks and provide it to the community.

So look, I’m really excited about that. That’s number one. I’m gonna take some more of your time and talk about number two. I’m also working with another company called Droople is digitizing the last mile of delivery of water.

So a lot of the conversation that we’re having right now is focused on municipal infrastructure. So municipal to building, to residential tower, to airport, to shopping mall.

But water, it’s an invisible risk. And as soon as it hits the infrastructure, we don’t really know what’s happening to that water.

The pipe or the integrity from municipal to infrastructure could be fantastic, but if the pipes within a three or four story building aren’t well, then we’ve got water leakage. We’re wasting energy to heat the water for boiling water. We’re sending people out to maintain those systems that probably don’t need to go there.

So what that company has done over a number of years is created a sensor-agnostic technology that can capture data from all the data assets.

They’ve got some fantastic algorithms in the back end and generate predictive advice to asset owners about managing their water assets more appropriately.

And the reason why they’re doing that, it reduces leakages by 20%, reduces carbon by 20% and reduces opex by 20%. So two very cool companies doing some amazing things in the water sector.

Antoine Walter: Well, regarding Droople, for the ones which, are regular listeners from that podcast, they can go back to season three, I think, where I had an interview with Ramzi Bouzerda, the CEO and founder. That way, you’ll have the full story!

Last question. What is the trend to watch out for in the water sector?

James Rees: You’ll probably guess by our conversation that I’m really heading have a hint. Technology. And the reason why I’m more around technology is I think it’s the enabler of change.

So if you think about space, so there’s corporate and also governors now focusing on space and how do we evolve the space race, and that’s all around technology.

So how do we put people in Mars and how do we sustain life? One of the things they’re grasping with is around water. Like how do we actually generate, recycle, reuse water when we’re off the planet, Right?

Those ideas will come back to us, similar to GPS did in the future. So for me, I think it’s all around technology going forward.

Antoine Walter: Perfect. Well, thanks a lot for your insights, and I’ll let you have a good rest of the conference.

James Rees: Thank you. Good talking!

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