Gaëtane Suzenet is Managing Partner at International Impact Partners (IIP), a company she started 3-4 years ago while working with Aster and is planning to set up a new fund in the not-too-distant future. At WEX, she’ll be on the panel of The Innovations Forum sponsored by Aqualia:
Who do you want to meet at WEX?
I’m keen to meet start-ups at any level – even early-stage ones would be good. I also want to get to know large tech companies in order to understand what has changed in their investment strategy, and what they see as their innovation and investment targets.
What do you do at IIP?
I work in an advisory capacity to large companies, start-ups, utilities, aiming to push the investment stance forward, and in the water sector, this means there is a lot to do. Investors have had a bad experience with water innovations, because, on the whole, they were more focused on tech than the actual business model. And public money has mainly been injected into the energy sector, rather than water. The result is that a new approach to water investment is absolutely needed.
However, although the water market has been very reluctant to adopt water innovation – from 2015 onwards, investment and innovation have been two of the sector’s biggest challenges – the good news is that things have started to change.
An example is ‘Water Innovation Clusters’ [innovation-oriented networks involving business, government and other organisations] which demonstrate the wealth and breadth of innovation. Scottish Water, for example, is lead partner in the Water Test Network, the initiative for North West Europe (NWE).
But it is still difficult to get private investment money. For instance, in the UK, the framework is heavily regulated, and therefore hard to access if innovation is not incentivised.
Investors are opportunistic, and look at trends. The water sector needs to be made more attractive to them. How? One way is to make the returns short – and yes, they can be, but the market isn’t informed enough about this. Also, innovations are much more fit-for-purpose now – there are more niche markets now for technology – but more work needs to be done on informing investors and end users on what’s available, and what start-ups actually do. This is what I do with my ‘portfolio review’.
I find that the utilities and large tech companies who are my ‘end-users’ (I don’t like the word ‘clients’) tend not to be informed enough about innovation.
Technology is often seen as a cost, rather than a benefit, and that vicious cycle needs to be broken. ‘Test Networks’ are proving very useful in mitigating this, but utilities can’t waste start-ups’ time trialling forever. We need to go a step forward and build some business models, which enable to share the risk between the provider and the end-user. New forward models will de-risk investing in water.
Are there currently many investors into the water sector?
Unfortunately, no. There are always ones linked to new concepts, such as circular economy, impact investment, smart cities etc, but it’s not easy to find pure water investment, especially in Europe, and we need to raise the profile of water again.
In the US, large tech firms have been investing in start-ups, and then they acquire them, which is quite encouraging, because it means it’s a key topic in their strategy.
Is there a European budget for water?
Yes there is! Horizon 2020 has been the biggest EU Research and Innovation budget ever over the period 2014 – 2020 with almost €80 billion dedicated to it. Water challenges have been obviously part of this programme and is included into the wider challenge of building a circular economy and a resource efficient society. The way they view investment is that for every 100 euros they’re investing into the Horizon 2020 programme, they will get 850 euros back to Europe’s GDP by 2030.
There’s plenty of appetite for developing innovation projects, a lot of seed money is available for start-ups, but the challenge is to scale up and stay active. In the US, Israel and Singapore things are more structured: there are more accelerators, and culturally it doesn’t matter if you fail!
We lack a global approach to the circular economy, but water – flooding as well as scarcity – will push things. In the last Global Risks Report from Davos, water was – again – in the top 10, so it constitutes a risk for companies, for productivity. For example, in France, water affects nuclear energy production, which provides 75% of energy. Yet, water still lacks consideration in the French top priority areas for investment and innovation!
Which technologies interest you?
None specifically, but there are lots of things which are super-interesting. In Europe, research and innovation projects produce a lot of interesting results that could be further exploited, whether it is for resource recovery in wastewater treatment plants or in digital water. We have also great technologies arising from a cross over between water and biotechnology!
How do you get Horizon 2020 funding?
The reasons companies don’t get EU funding are because they don’t demonstrate enough knowledge of the environment in which they operate and how they can be better than their competitors, and they don’t always have a clear and realistic business strategy.
Everyone can apply for funding, but don’t apply if you can’t demonstrate the disruptive aspect of the tech,, and with a clear scale up strategy. And be positive: people tend too much to think they only have a 5% chance of success!