Desalitech Builds on Boston-Area Water Tech Cluster With $11M Funding

When Governor Deval Patrick leaves office at the end of the year, he will be remembered for fostering the growth of Massachusetts’ life sciences and energy technology industries. Less known is a fledgling water technology cluster, which also received a hand from the Patrick administration.

One company in the state’s water cluster—Newton, MA-based Desalitech—today announced an $11 million equity funding round led by Spring Creek Investment Management, a family investment office based in Philadelphia. The money will help Desalitech expand sales of its efficient water purification products, the company says.

Desalitech developed a system for treating wastewater that improves on conventional reverse osmosis technology, lowering energy use and the amount of waste, the company says. Its products are being used in a number of countries and drought-stricken California, where Desalitech’s machines are desalinating aquifer water to make it suitable for agriculture or drinking.

A 2012 map of the Massachusetts water cluster lists dozens of companies working in various fields of water treatment. Although the number of companies is much less than the number of energy-related businesses in the state, there are similarities between energy and water tech companies.

Many energy and water startups are working in industries with a number of large incumbents, which haven’t seen the same rate of innovation as life sciences or information technology. Materials, such as membranes to filter water, are essential for plenty of businesses, too.

Venture capitalists tend to play a smaller role in energy and water startups, compared with life sciences or tech for early-stage funding. In the case of Desalitech, its money has come from family offices, private equity fund Liberation Capital, and a water-specific venture capital fund called AquAgro Fund.

Water tech companies are also diverse. Like Desalitech, Boston-based Oasys Water is targeting commercial and industrial users of water. But Somerville, MA-based Drinkwell, which recently won $100,000 in the MassChallenge business competition, has developed an alternative to reverse osmosis for cleaning water in developing countries.

http://www.xconomy.com/boston/2014/1...h-11m-funding/


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