By Lynda Kiernan, Global AgInvesting Media
With offices in New Hampshire in the U.S. and in Saudi Arabia, Waterfund is a global water investment and trading firm that invests in, operates, and manages water treatment solutions and technologies.
Together with Israeli global venture investor OurCrowd, the pair have announced a partnership to build a dedicated portfolio of 15 water and agtech companies. Waterfund has already committed $50 million to the fund, which is to be managed by OurCrowd, and has made its maiden investment in vertical farming leader, Plenty.
Founded by Matt Barnard and Nate Storey in San Francisco, Plenty grows leafy greens using a highly-efficient vertical system that grows pesticide-free crops in rows of 20-foot tall columns, or walls, rather than horizontally. This configuration is highly efficient as it allows water to trickle down each column, enabling nutrients to be gravity fed rather than pumped into the system.
Since its launch, Plenty’s technology and methodology have attracted some of the world’s leading investors, bringing its funding as of October 2020 to more than $500 million when it raised a $140 million Series D led by Softbank.
In addition to a portfolio of direct investment such as this, Waterfund and OurCrowd are also collaborating on the launch of Aquantos – a new water-focused platform through which to issue Blue Bonds and other innovative water investment products. Much like Green Bonds that back environmentally-beneficial projects, Blue Bonds act in a similar way to back projects that benefit the world’s oceans.
“We are working to issue Blue Bonds that can be both climate bonds-certified and backed by sovereign or sub-sovereign borrowers,” said Scott Rickards, CEO, Waterfund. “This new financial tool and others are being designed to enable water projects in the Middle East to acquire leading technologies to address water scarcity in a fundamentally new way.”
“In 2016, the Paris Agreement heightened interest in green bonds,” added Rickards, “…in the years since, we’ve seen a spike in companies, municipalities, sovereigns and banks issuing green bonds. We expect that demand for next generation water-oriented bond products will see similar growth.”
Increasingly, investment managers and their backers are seeking to create real positive impact in the world through investments that also generate healthy returns. In H1 2020, investments in sustainable funds grew by a record $20.9 billion, according to data from Morningstar, which noted that H1 nearly equalled the annual record investments of $21.4 billion achieved in 2019.
Additionally, between January 2020 and June 2020, U.S.-based sustainable equity funds outperformed more traditional non-ESG-focused funds by 2.8 percent in terms of total returns, and lost 3.9 percent less due to volatility during the pandemic, according to Morgan Stanley.
And no other investment category may be more in need of positive impact as water. Despite this critical need, investing in water can be complex and multidimensional, explained Jeremy Stroud in his article, The Rise of Impact Investment in the Water Sector, published by GAI News in November 2020.
“Investing in water management and its underlying industries does not generally classify as a traditional sector,” noted Stroud. “Rather it is a complex intersection between agriculture, technology, real estate, commodity rights, infrastructure and other divisions of a national economy.”
But Stroud goes on to turn a lens on the vast opportunity for investment in the space, saying, “Two opportunities become abundantly clear to impact investors in the current hydrological and infrastructural environment. First, more investment is needed in research and development for water technologies that improve resource-use efficiency and prevent pollution or salination from occurring. Next, significant additional capital will need to be allocated towards water infrastructure and management projects; not only to bridge the current US$560 billion investment gap, but also to implement efficiency technologies.”
Given this need, and with the Abraham Accords put in place last year, Waterfund and OurCrowd are presented with an opportune investment landscape to foster critical advancements in water security throughout the Middle East.
“The Abraham Accords present a huge opportunity to bring new water and agricultural technology to the water scarcity challenges of the entire Middle East,” said Jon Medved, founder and CEO, OurCrowd. “Alongside Waterfund, it is our mission to invest in and help build game-changing technology companies. We are excited to be working together with Waterfund to drive more private capital to address the critical challenges of water.”
– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com
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