“What oil was to the 20th century, food and water will be to the 21st – precious, geopolitically powerful and contested.” The Grab (Investigative documentary on global resource control, coming out 2024)
TL;DR
- The economic value of water from freshwater ecosystems in 2021 was estimated at approximately US$58 trillion, equivalent to 60% of global GDP (WWF, 2023)
- Water as a commodity is kept artificially cheap through subsidies which creates little incentive for industries to improve water management. As a result, water innovations have been viewed as less critical and so failed to receive substantial venture investment
- However a predicted 40% shortfall in freshwater by 2030 due to overconsumption, contamination, and climate change is creating acute business risks:
- Multiple industries are being forced to map their water supply chains (from input sourcing —> purification → disposal / reuse)
As industries look for innovations to mitigate water as a business risk, I am bullish on the following investment areas:
- Theme: Wastewater treatment
- Industry experiencing a CAGR of 7.68% and expected to reach $573 billion by 2031
- Industries like Mining, Oil & Gas, and Industrial Activities are investing in solutions which otherwise will create financial and reputational risk
- Interesting companies in this space include Aquafortus (reduced volumes of wastewater), Aclarity (safer disposal) and Digital Paani (operational efficiency)
- Theme: Smart monitoring systems
- Industry is growing at 11.09% and predicted to reach USD$41.53 billion by 2032
- Today an estimated 30% - 40% of global clean water is lost to leakage. Agriculture, Utilities, and Real Estate are just some of the industries seeking solutions for real-time water usage, leak detection, and future resource planning
- Companies like Verdi (precision agriculture), Varuna (real-time water data) and Laiier (leak detection) can offer companies ways to monitor water consumption at scale
- Industry vertical: Data centres
- The increased use of AI and internet productivity data centres are hyper-scaling demand for water to keep data centres cool and functioning at optimum capacity
- The global data center cooling market size is set to triple from USD$12.75 billion in 2023 to USD$36.79 billion by 2032
- Investment options range from Iceotope Technologies (water reuse), Coolgradient (AI data center optimization software) and JetCool (micro-convective cooling)
‣
‣
‣
‣
‣
‣
‣