7 firms investing in India's water sector

India is the world’s second largest water consuming country. Approximately 170 million Indians lack access to safe, clean drinking water. Families, especially women and girls, spend long hours collecting water from local sources, and end up with water that is unsafe for consumption. Water-borne diseases cost an annual $600 million in lost production and medical treatment. Challenges faced by water sector are the increase of water demand due to urban sprawl, industrial growth, political and regulatory disputes, water cycle imbalances and increasing irrigation and agricultural demands.

This Unicef “Water in India: situation and prospects” 2013 report shows that water access figures in India had an increasing trend, but access to safe drinking water remains a challenge in rural areas. About 67 per cent of Indian households do not treat their drinking water and it is estimated that over one third of rural ground water sources in India may be microbiologically contaminated. Furthermore, only 33% of the country has access to traditional sanitation. According to the World’s Health Organization (WHO), out of India’s 3,119 towns and cities, just 209 have partial wastewater treatment facilities, only 8 have full facilities and 114 cities dump untreated sewage and partially cremated bodies directly into the Ganges River – downstream, the untreated water is used for drinking, bathing, and washing. For instance, the Ganga-Meghna-Brahmaputra basin covers land area and accounts for 60 per cent of India’s water resources, while the catchment of rivers flowing west is 3 percent and they account for 11 per cent of the country’s water resources. Therefore, 71 per cent of India’s water resources are available to only a small share of the country’s population. In addition, water scarcity in India is expected to worsen as the overall population is expected to increase to 1.6 billion by year 2050.

On the other hand, despite this alarming scenario, the sector has huge business potential given the size of India’s unmet need. The Indian water market is $ 30 billion sized and, by 2030, this potential shall revolve around four key themes: equipment supply, public private partnerships for water supply and distribution, water treatment plants and water EPC (engineering, procurement and construction) business and integrated water resource management for utilities.

We look at seven firms that are investing in the water sector and helping to improve the lives of millions in India:

1. Aavishkaar: based in Mumbai, this early-stage investment fund makes equity investments in social enterprises that focus on the base of the pyramid population from a variety of sectors including agriculture, healthcare, water and sanitation, education and energy among others. Within the water sector, they have invested in Waterlife.

2. Acumen: Acumen raises charitable donations to invest in companies, leaders, and ideas to serve low-income population. In India, they started focusing the Water sector in 2004 with Waterhealth International, and have also invested in Guardian and Spring Health, with more than $ 3 million of total investments.

3. Avantage Ventures: an Asia based social investment and advisory company with offices in Hong Kong and Beijing. They work with a mission to invest in key development sectors in Asia-Pacific which address the most pressing challenges. Avantage have invested in Piramal Foundation that backed Sarvajal, which develops innovative solutions to provide clean drinking water across India. Sarvajal franchises their proprietary filtration equipment to local entrepreneurs who, then, operate the machines and sell water at a minimal cost to customers.

4. Khosla Impact fund: has invested in Driptech, which makes affordable drip irrigation designed for small-plot farmers. Through proprietary manufacturing and novel distribution, Driptech enables any farmer to invest in appropriate irrigation technologies, allowing them to save water, labor and substantially increase their yield and income.

5. LGTVP: part of The Liechtenstein Global Trust (LGT), group of the princely House of Liechtenstein, the LGT Venture Philanthropy supports organizations with outstanding social or environmental impact, providing financial intellectual and social capital to supported organizations. Striving to increase the sustainable quality of life of less advantaged people, LGTVP have made an investment in Driptech.

6. Matrix Partners: operating in the United States, India and China across multiple sectors, they have partnered with hundreds of innovators. With Matrix India advisory offices in Mumbai, the fund invests across significant growth sectors in India, including internet, mobile, education, financial services, healthcare, consumer and emerging areas. Within the water sector, they have made an investment in Waterlife, which develops solutions to provide safe pure water, and Chetas, a company focused on providing turnkey solutions in water management.

7. The Sandi Group: this Washington-based company is investing $ 7 million to fund research for developing water-purification solutions in India, through Aquakraft. This fund will help improve water-treatment technologies in the Asian country.