Israeli venture firm OurCrowd is partnering with Waterfund, a US-based global water investment and trading firm, to build a dedicated investment portfolio of 15 leading water and agricultural technology companies.
Waterfund has committed $50 million to the OurCrowd-managed portfolio, the parties announced last week, with an initial investment in San Francisco-based vertical farming company Plenty, Inc.
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The companies also announced that they are jointly working on an innovative water platform called Aquantos, a financial product that will issue blue bonds, which back projects related to ocean conservation, as well as other water investment products.
“The lack of private capital has held back the huge growth potential of the water innovation sector. Waterfund’s partnership with OurCrowd is designed to solve those challenges by offering equity investments in innovative tech companies and debt financing to carefully selected projects and water-saving technologies,” said Waterfund CEO Scott Rickards.
“Waterfund is constantly seeking innovations to attract private capital to water,” he added.
Waterfund was founded in 2013 and invests in, operates, and manages water treatment solutions and technologies. The company also publishes advanced data analytics through its proprietary platform developed in partnership with IBM (the “Water Cost Index,” or “WCI”), enabling metric-based investment decision-making and climate-based risk mitigation.
Rickards said interest in blue bonds is expected to grow significantly, pointing to heightened interest in green bonds – designed to support climate-related or environmental projects – following the Paris Agreement. The 2016 treaty saw states commit to climate change mitigation, adaptation, and finance.
“In the years since, we’ve seen a spike in companies, municipalities, sovereigns, and banks issuing green bonds. We expect that demand for next-generation water-oriented bond products will see similar growth,” said Rickards said.
A 2019 Morgan Stanley report found that 85 percent of individual investors were interested in sustainable investing, up 10 points from 2017. Among Millenial investors, the interest is at 95 percent, according to the survey
Rickards further indicated that the OurCrowd-Waterfund collaboration will have a focus on water projects in the Middle East “to acquire leading technologies to address water scarcity in a fundamentally new way.” Waterfund has a Saudi Arabian office, Waterfund Saudi Limited, in Riyadh.
The Abraham Accords, which saw the United Arab Emirates and Bahrain normalize relations with Israel last summer, followed by Sudan and Morroco, “present a huge opportunity to bring new water and agricultural technology to the water scarcity challenges of the entire Middle East,” said OurCrowd CEO and founder Jon Medved.
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“Alongside Waterfund, it is our mission to invest in and help build game-changing technology companies,” said Medved, adding that the partnership with Waterfund will “drive more private capital to address the critical challenges of water.”
OurCrowd, one of Israel’s most active VC firms, manages $1.5 billion of committed funding and investments in more than 240 portfolio companies and 25 venture funds. OurCrowd has a number of partnerships in the UAE.
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