Investing in Water Aligning Investment Strategies with Water Innovation 2025

As water touches on every activity, the possibilities for water investment are extensive. The four best- known and defined areas of water investment today are: quantity, quality, environmental health and access to sanitation – with the first two being the main areas of investment activity. Both quantity and quality have a clear addressable market, deliver a sustainable competitive advantage and provide the greatest opportunity for technological solutions.UpLink, the early-stage innovation initiative of the World Economic Forum, is dedicated to advancing entrepreneurial solutions to global challenges. Through the Aquapreneur Innovation Initiative, it specifically supports water-focused start-ups from pre-seed to Series A. This paper will now explore the landscape of early-stage water innovation and highlight the investment opportunities it presents through the lens of climate risk.1.6 Investing in early-stage water innovation Early-stage water innovation landscape The water sector can be complex, and there are many ways in which to divide the water innovation landscape. For the purposes of this paper, the early-stage water innovation landscape has been divided into the following areas: treatment; reuse and circularity; monitoring and analysis; access and supply. It should also be noted that there are many overlaps between these categories. Each of these areas not only addresses critical water-related risks, such as scarcity, pollution and system inefficiencies, but also offers growth potential for impactful, innovation-driven investment. Treatment: This category includes both hard technologies and nature-based solutions, covering advanced treatment processes for utilities and industrial applications, as well as environmental remediation technologies. Reuse and circularity: Encompassing water capture and reuse systems at commercial, residential and urban scales, this area also includes appliance-level solutions and innovations tailored for agricultural water recycling.Monitoring and analysis: This category covers digital and analytical technologies such as leak detection, water quality monitoring and precision agriculture enabled by advanced data collection and analysis. Access and supply: Solutions in this area address water provision through technologies such as desalination and decentralized systems that deliver safe, potable drinking water, especially in underserved or remote communities. It is important to recognize that each of these technology categories serves a diverse range of customer segments and operates under diverse business models. While many water start-ups identify as cleantech ventures, it is a mistake to assume that water tech is focused solely on public utilities. These companies target a broad spectrum of markets, from food and beverage manufacturers and industrial users to agricultural and residential customers. Reflecting this diversity, Dealroom data shows that water treatment companies attracted the largest portion of water tech venture capital funding in 2023 (accounting for 63% of total investments), primarily concentrated in the wastewater treatment segment.39 Indra Water: compact smart systems for wastewater recycling. Investing in Water: Aligning Investment Strategies with Water Innovation 13