Partnering Across International Boundaries for Water Security Through Technology and Startup Support


Owned by Kando, used with their permission
Logging water quality data in an urban setting

The State of Colorado was one of the last areas in the United States settled by Europeans. Denver, its largest city, had but a handful of permanent residents as recently as the 1850’s. In contrast, Israel and surrounding areas include some of the oldest human habitations in the world; some cities in the region trace their history back 6,000 years.

These two areas, separated by thousands of miles, may have little history in common, but they do share something else: a climate of limited rainfall. Both face significant water challenges. They need to collect as much fresh water as possible and keep it as clean as possible. Two recent alliances, the Israel-Colorado Innovation Fund and the Israel – US Water Initiative, are demonstrating how collaboration around innovative technologies can allow communities to transcend large gaps in space and culture to solve common problems.

Although 60% of Israel is a desert and the rest is semi-arid, Israel exports water to its neighbors. This is not the mystifying result of Moses hitting the rock but rather the result of constant innovation that started long before Israel was established in 1948. Jewish leaders led by David Ben Gurion, who later became the first Prime Minister of Israel, were determined to prove wrong the British White Paper that justified banning Jewish immigration (to the area that later became the State of Israel) in part by claiming that there would not be enough water in the area to meet the demand of a growing population. This determination to innovate combined with the approach to plan water for the greater good led to the beginning of operation of the Israel National Water Carrier in 1964.

Education of the public has also been a big factor contributing to the success of Israel conserving water. It starts with the Israeli nursery rhyme: “Drip Drop Clap your Hands.” (Note the contrast to the popular US nursery rhyme: “Rain Rain Go Away.”) It is demonstrated throughout Israel with signs stating that “Every Drop Counts,” through public TV commercials and through the willingness of the public to pay high prices for water.

The high pricing of water (which captures all stages of water management from pumping through treatment and distribution) incentivized farmers to use crops that grow in water-stressed environments and salty water and use water-conserving technologies. This in turn incentivized entrepreneurs to develop more technologies that conserve water.

In addition, the Israeli government’s support of entrepreneurs mitigates some risks involved in innovation. For example, the Israeli Innovation Authority provides around $500M US in grants every year for startups. The government also shares the risks of deploying innovative technologies with Israeli water utilities by sponsoring up to 70% of projects of water utilities when a new technology is deployed. Separating water from politics has led to the establishment of a technocratic regulatory National Water Authority that oversees the water budget and plans water from the time it touches the ground until the time it is used. Since water in Israel belongs to the public, its use is planned for decades ahead and assumes water innovation that does not yet exist.

Israel has thus become a leader in water innovation. Five desalination plants provide Israel with around 80% of its water for consumption. The country treats around 95% of wastewater and reuses around 86% of that for agricultural uses. Other innovations include use of drip irrigation (that was invented in Israel) in around 75% of Israel’s irrigated fields; cloud seeding to capture the rain and reuse it; and leading drip detection technologies, smart management of water and wastewater technologies and leading cyber security technologies for water and wastewater utilities. Because of Israel’s leadership in water management and innovation, many countries consult with the Israeli government on how to solve water crises.

Despite successful innovation, however, Israeli entrepreneurs face challenges penetrating the US market for many reasons such as time zone differences, high travel costs and big business culture gap.

The Israel – Colorado Innovation Fund (ICI Fund) is an effort to advance the cause of Israeli-American cooperation on water technology innovation while helping Israeli entrepreneurs overcome some of their challenges penetrating to the US. The ICI Fund is a private venture capital fund backed by experienced investors. Its objective is to bring comparable innovation by connecting groundbreaking Israeli startups with Colorado, and eventually the rest of the US. In October 2017 the ICI Fund was formally registered in Colorado and by 2021 the goal is to invest in around ten Israeli startups in the Water, Energy and Transportation sectors and connect them with the US market, through Colorado.

Former Colorado Governor John Hickenlooper supported the ICI Fund and its vision of attracting Israeli innovation in water and cyber security. The Israel Innovation Authority supports the ICI Fund because the Fund’s vision is aligned with the Israeli government’s vision of helping Israeli startups successfully penetrate the US market. Israeli startups supported by the ICI Fund may apply for additional grant money from the Israeli Innovation Authority.

The ICI Fund partners with Colorado’s leading technology incubator, Innosphere. Innosphere is a long-standing non-profit technology incubator headquartered in Fort Collins with multiple offices across Colorado. Innosphere supports approximately 40 high-tech startups per year, working closely with founders and CEOs to help them achieve key business milestones. Innosphere accelerates the success of high-impact science and technology-based startup and scaleup companies by ensuring that companies are investor-ready, making introductions to Innosphere’s long-standing corporate partners, exit planning, and connecting entrepreneurs with experienced advisors, local talent and investors.

Innosphere is led by CEO, Mike Freeman, also a General Partner in the ICI Fund. Every Israeli startup selected for investment by the ICI Fund is supported by Innosphere. “The potential of bringing promising Israeli technologies to Colorado is huge. It will attract global corporations to Colorado and will strengthen our startup ecosystem,” said Freeman. “Innosphere will support the growth of Israeli startups in Colorado by opening doors to corporate partners with whom we have long-standing relationships, helping the Israeli companies create a US presence, and by making sure the companies can provide services in a way that meets and exceeds US corporate standards.”

In parallel with the challenges faced by Israeli entrepreneurs penetrating to the US market, many US wastewater and water utilities face challenges deploying new technologies. There are roughly 50,000 such utilities scattered all over the US. Many seem disconnected from each other, do not easily transfer information about technology needs and solutions, seem risk-averse, and often lack human resources and budget to screen and vet technologies. Municipalities that are regulated by the state face many regulatory barriers as well. This allows continuance of an unadvanced (technology-wise) status quo.

This gap between need and available resources incentivized the formation of the Israel – US Water Initiative, a platform that aims to duplicate the water ecosystem in Israel. While initiated and centralized in Colorado, this initiative is available throughout the US and Canada. The goal of the Israel – US Water Initiative is to connect informally US entities that are interested in water innovation and innovative water solutions originating and built in Israel’s innovation culture.

The Israel – US Water Initiative is supported by Oded Distel, Director of Israel Newtech at the Israel Ministry of Economy, Israel Shamay, Head of the Americas Operations, Israel Innovation Authority and Danny Lacker, Head of Water Security, Israel National Water Authority. This reflects the alignment of the Initiative with the Israeli government’s policy of helping other countries overcome water scarcity. Through this Israel – US Water Initiative, US entities can learn about promising Israeli companies with innovative solutions for the water industry. US entities are also able to receive matching funds from the Israel Innovation Authority for pilots with Israeli innovative technologies. The Israel – US Water Initiative is also supported by the State of Colorado (previous Governor, John Hickenlooper), State of Maryland (Governor Larry Hogan) and in discussion with other governors, including Arizona Governor, Doug Ducey). The goal of these governors is to strengthen the business ties with Israel in the water industry and import innovative water technologies to their states.

The Israel – US Water Initiative has an Advisory Committee composed of members of organizations that are leaders in innovation in the water industry and advanced in their approach to water. These include Dean Amhaus, (President & CEO, The Water Council, Wisconsin), John Coleman (Board Member, East Bay Municipal Utility District, California), Chris Dermody (CIO, Denver Water, Colorado), Kelly DiNatale (President of DiNatale Water Consultants, Colorado), Thomas Kuczynski (CIO, DC Water, Washington D.C), Bob Lembke (Chair) (President, United Water and Sanitation District, Colorado), Will Sarni, (CEO, Water Foundry, Colorado) and the Israeli government representatives mentioned above.

Many US utilities have begun deploying innovative technologies and some are very advanced and innovative in their approach. A clear demonstration of that is the fact that approximately 60 US advanced utilities and entities have already joined the Water Initiative, eager to learn about innovative technologies coming out of Israel. These include utilities in Colorado, Maryland, California, Arizona, DC, Nevada, Texas, Ohio and Oregon. The Initiative hopes to grow to become the central node for water innovation in the US.

One potential focus of future growth is likely to be asset management and renewal and replacement of water and wastewater infrastructure. According to a recent study by American Water Works Association (AWWA), for the fifth year in a row water utilities have identified such renewal and replacement as their greatest area of concern. In addition, pollution was ranked as having the largest potential negative impact at macro-scale on the water industry.

AWWA is the largest and oldest water association in the US, established in 1881, serving over 50,000 members and led by David LaFrance. AWWA supports the Israel – US Water Initiative. Doing so is aligned with AWWA’s vision of a “Better World Through Better Water” and its innovation strategy to help utilities by connecting them with innovative technologies.

The US water and wastewater utilities that are part of the Israel – US Water Initiative leverage the screening and vetting of Israeli companies done by the ICI Fund. As the success of the fund is contingent on the return on investment for the private investors, the ICI Fund’s process of screening and vetting Israeli startups is rigorous. The ICI Fund screens hundreds of startups before selecting one for investment – a process that can take several months. The criteria for selecting an Israeli startup include strength of technology, team, business plan, customers’ feedback, and market need. The ICI Fund consults with experts and potential US clients about the examined technology and the need for it in the US market.

The first Israeli startup that the ICI Fund supports is KANDO, a company providing smart water management solutions. KANDO, an Israeli company, was established with the goal of leading a significant improvement in the quality of effluent discharged to the environment and the quality of wastewater for reuse.

Wastewater is collected in cities through a complex network composed primarily of underground pipelines. The wastewater collection system’s lifetime depends on the quality of the wastewater that passes through it. Pollution events damage the wastewater network, the treatment plants and the environment. These events are invisible. They reduce the lifetime of the infrastructure but do so silently. Only when wastewater overflows streets or is spilled into rivers or oceans is the damage noticed. Such a crisis could result in poorly-treated effluent being discharged to the environment, and potentially to a permit violation.
 

Owned by Kando, used with their permission
Kando technology used in the field

 

KANDO’s technology identifies pollution along the wastewater network and could help prevent the crisis. KANDO’s cloud-based SaaS (Software as a Service) IoT (internet of things) solution is comprised of monitoring sensors, wireless communication, software and big data analytical tools. These tools enable customers to track and anticipate events across the wastewater network.

KANDO’s system collects and analyzes data from the wastewater network 24/7 and, based on AI (artificial intelligence) and machine learning tools, provides a clear view of wastewater quality at every given point of the collection system and information about events (pollution, corrosion and other) in the wastewater network. Depending on the utility’s needs, KANDO’s technology can indicate events and their exact sources based on indicative parameters measured by sensors in the wastewater network.

KANDO’s technology is used by some of the largest cities in Israel such as Haifa (an industrial port city) where KANDO is installed at the Mei-Carmel utility. KANDO’s technology has also already been introduced to several US wastewater utilities outside of Colorado and in Colorado that all expressed keen interest in learning more about the technology and some are moving forward to deployment. KANDO’s technology was selected by a leading US engineering firm for deployment in California (already deployed) and Texas.

The ICI Fund hopes to help KANDO expand in Colorado to help address that state’s critical water needs. When, as in Israel and Colorado, water is scarce to begin with, there is a greater premium placed on water quality. KANDO’s technology could help Colorado protect the quality of its limited water resources by preventing disruption of wastewater treatment systems. In this way technology developed by one of the world’s oldest communities can help one of the world’s newest communities address a common resource problem.

The author greatly appreciates the assistance that Jenny Gelman, Barb Martin and Paula MacIlwaine provided in the preparation of this article.