Ahead of the World Water-Tech Innovation Summit, we spoke to Reinhard Hübner, Investment Manager at SKion Water, about the most exciting investments in 2019 and what advice he would give innovators looking for investors.
What has been the most exciting or surprising investment of 2019 and why was it exciting or surprising?
At SKion Water we had two equally exciting investments this year. EnviroChemie acquired the Swedish company Processing in February. Our entry into the Scandinavian market worked out very well and in the first ten months we already won three industrial projects in three different Scandinavian countries that the teams of Enviro and Processing collaborated on. In summer ELIQUO WATER GROUP acquired the German company KG Nellingen. With this acquisition, our municipal business in the German market grew by more than 50 percent and we added a strong expertise in drinking water solutions to the portfolio. In both cases, the acquisition is part of a long-term succession plan and the management teams stay on board to integrate their companies into our group and become part of our leadership team. We consider it one of our strengths to acquire and integrate family-owned businesses into our family of water companies and these are two great examples.
Outside of SKion Water the most surprising and at the same time impressive move has been the strategic push by DuPont to significantly grow its position in the membrane market. To execute several strategic investments in such a short period of time is impressive.
What advice would you give to a water-tech innovator when seeking investments?
Innovators should sharpen their pencil to clearly communicate what is unique about their idea / technology, how it differentiates from current practice, what problem it solves and what the business case for the end user is. If an innovation is to replace an existing solution, it should meet the 30% more economical hurdle (i.e., be at least 30% more economical for the end user). With a clear value proposition, an innovation also becomes attractive for investors. In addition, the business plan should be realistic and take into account the conservative nature of the water market and the search for investors should focus on investors that can add more value than just money. It might be financially less attractive to get a strategic investor on board but the right strategic investor can significantly improve the chances of success. It is possible to find investors that fund unrealistic business plans with large investments but this can destroy the company.
What will you be looking out for at the World Water-Tech Innovation Summit in London this year?
The themes covered at the World Water-Tech Innovation Summit always contain ‘food for thought’ in terms of market and technology trends and potential partners to collaborate with. Each year, I come back from the summit with a few fresh ideas or leads to follow up on. In addition, I am looking forward to getting to know new innovative technology players and meeting up with old friends from the industry.
Reinhard will be speaking on the Day 2 panel Investor Forum: Accelerating Water Project Financing at the World Water-Tech Innovation Summit.
Find out more about SKion Water.