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Navigating Funding and Trends in 2025

What areas of water-tech are hot in the minds of investors in 2025? When seeking funding and pilot partnerships, what should start-ups be looking out for?

Unexpected Truths in Water-Tech Investing

Traditionally overshadowed by more glamorous sectors, water-tech is now garnering attention from private equities, venture capital, and corporate players alike. Helge Daebel of Emerald Technology Ventures underscores a surprising shift: industries outside the water sector are recognising water as a key business risk. “What has newly emerged and represents an unexpected positive driver, is the understanding of several players from different industrial verticals that water is a key risk factor for their business”, he notes. "This realisation has catalysed multi-million-pound investments in water conservation and sustainable solutions, marking a significant departure from the traditionally slow adoption of water technologies."

“Water-tech investing is, dare I say, becoming cool,” points out Kelly Trott of Aqualateral. "Today, investor interest is rising, with climate-focused and brand-name VCs, alongside corporates, increasingly appearing on cap tables. This momentum is driven by the water-energy nexus, the rise of digital solutions, regulatory tailwinds, and the growing costs of water-related disasters. JPMorgan and ERM’s report on water resilience underscores immense opportunities but also highlights that private investment still falls short of the sector’s critical needs. To attract even more capital, we must leverage innovative funding mechanisms, align incentives across sectors, and showcase scalable success stories that create real FOMO for water."

or Tom Ferguson from Burnt Island Ventures, water-tech is gaining traction but there's a way to go: "I think we're slightly ahead of schedule in terms of the broader investment world waking up to the opportunity. PE is itching to get in, M&A opportunities are really oversubscribed, and VC activity beyond the specialists is healthy. VC activity is robust, and broader investment communities are beginning to appreciate the sector’s potential. We're not cool yet, by any means, but we may have just got a new haircut.”

John Robinson of Mazarine Climate highlights the unexpected fervour around investment for PFAS destruction technologies in 2024. “The regulatory ‘shoe-drop’ seems imminent to these investors, however, ‘old hands’ in this space realise that PFAS destruction regulations are still many years away. Optimists, or those who have already sunk money in the PFAS destruction, will probably disagree.  With the 2024 PFAS craze now behind us, the smart money in PFAS is in testing and monitoring - which is a today opportunity."

"There is a growing emphasis on community engagement and localised solutions.” says Oliver Puckering from Xylem Innovation Labs: "Traditional investors understandably focus on technologies with the opportunity to reach large scale, neglecting smaller, grassroots initiatives that effectively tackle specific regional water issues."

Public Sensitivity, Climate Awareness, and Affordability

“The public's growing focus on climate and affordability is putting an exclamation mark on water and wastewater investments both in terms of infrastructure needs and advanced technologies.” Helge observes “a heightened demand for technologies addressing water scarcity, resilience, and emissions. This demand reflects growing awareness of water’s intersection with food, energy, and health security.”

“Climate issues are water issues… and water issues are power, food, health, and affordability issues.” Oliver highlights the role of climate and affordability in driving investment decisions. Utilities face the dual challenge of addressing climate impacts while keeping costs manageable for consumers. "Formulating an enticing and engaging positive story typically has not been a strength of the water sector. This urgently needs to be addressed so that the value of water, and the processes supporting its delivery, can be better understood and accepted."

“The escalating impacts of climate change, including recent disasters in the U.S. such as Hurricanes Helene and Milton and the fires in Los Angeles, are causing widespread disruption,” Kelly notes, emphasising the need for resilient infrastructure and innovative adaptation technologies to help communities prepare for and respond to these events. Innovations that reduce emissions, enhance efficiency, and align with regulatory frameworks offer compelling value propositions for both investors and stakeholders.

Promising Opportunities in 2025

Digital Transformation and AI-Driven Solutions Across the board, industry leaders see immense potential in digitisation. Technologies leveraging AI, IoT, and advanced analytics promise to enhance efficiency, reduce costs, and improve water quality monitoring. From automating manual processes to predictive maintenance, these innovations hold lucrative potential.

Circular Economy and Resource Recovery Gaëtane Suzenet of the European Water-Tech Accelerator emphasises the promises in the "hidden resource" that is wastewater. "All technologies that foster a circular economy approach, enable water reuse and resource recovery should be invested in. There is a growing demand for additional water and an increase in wastewater production, leading to new market opportunities. The circular economy is fostering markets for new technologies like greywater reuse. Local markets might develop, allowing industries to sell recycled water and recover resources. Utilities could transform into resource recovery factories and sell surplus energy to communities."

Decentralised and Democratised Systems “Democratisation of solutions. Or, we call it the ‘quickbooks-isation’ or ‘turbotax-isation’ of solutions (that used to be expensive and complex) that help the proverbial little guy understand the category, severity, and probability of climate-change-induced water risks,” notes John.

Helge proposes that these systems offer adaptability and localised water reuse capabilities, making them critical in regions facing water stress. “Decentralised treatment solutions, including modular and off-grid systems, are gaining traction as they address water scarcity and resilience.”

Earth Observation (EO) Technologies John further predicts that “EO—satellite technology—will play a pivotal role in 2025, providing enhanced visibility into water quantity and quality risks. Incumbents (Asterra, Rezatec, and more) will need to be on the look out for slew of new entrants focused on leveraging EO to address a wide range of water risks."

Cooling Technologies for Data Centres “As AI and cloud computing drive the rapid expansion of data centres, their water and energy demands have surged.” This implies a greater need for “water-efficient cooling technologies, sustainable energy solutions, and replenishment initiatives to offset water use and ensure long-term sustainability”

Kelly points out alongside replenishment initiatives to offset water use, particularly in water-stressed regions.

Challenges and the Road Ahead

Despite the sector’s promise, challenges persist. Gaëtane laments a significant gap in water-tech investment despite the availability of solutions to mitigate climate risks. She stresses “the need for market-driven and investment-driven deployment of these technologies.”

"Opportunities to effectively and efficiently reduce emissions, truck rolls, or final disposal volumes without huge impacts on the cost to consumers, will provide enticing value propositions to both utilities and investors," says Oliver. “There isn’t a magic formula that can meet all these needs, so investors must think broadly and consider how potential technologies could fit into larger systems and opportunities. Much of the sector’s technology development and investing is still driven by regulation. This may shift in the near term, as investors wait to discover what changes will result from recent elections. They may focus on technologies that are applicable to regions in which regulations have recently been enacted."

Gain more insights and engage with international investors and utilities shaping the future of water-tech at the summit when these investors gather to advance investment for the future of water.