Charlottetown cleantech company Island Water Technologies has closed a $500,000 round of funding from Island Capital Partners and Natural Product Canada.
The company announced the financing, which will be used to commercialize its new bio-electrode sensor technology, at a reception today in Charlottetown. IWT also said recently that it has been accepted into the San Francisco-based water-focused accelerator Imagine H2O.
In an interview, CEO Patrick Kiely said that both investors are contributing through convertible loans, meaning the investment will become an equity stake when the company raises its next funding round. Island Capital is a relatively new group of investors based on P.E.I. NPC is a national organization based in the P.E.I. capital that supports companies across the country that use natural products in their businesses. The IWT investment is the first in Atlantic Canada for Natural Products Canada.
“This is absolute huge,” Kiely said of the investment round. “This really fills that gap. We needed 12 months to validate certain technical milestones and this cash allows us to get across that chasm of doom.”
Based in Montague, P.E.I., IWT now has two products on the market, both of which offer efficient means of treating water away from urban locations. Regen is a solar-powered system that can treat waste water for remote facilities ideally housing 75 to 250 people. And the company also offers ClearPod, an efficient septic system for individual households.
The company now has three installations of its Regen product, and Kiely said the company is working on more sales, especially in the Middle East and North Africa, though he declined to name potential customers. He added that ClearPod is selling, not only in Canada but also in such countries as China, Honduras and Kenya. Kiely admitted ClearPod is not yet selling in the numbers he would like, though the company hopes to increase its sales soon.
IWT will use part of the proceeds from this round to commercialize its bio-electrode sensor technology, which it calls Sentry and has been working on for 4.5 years. Sentry is a monitoring system that resides in the water treatment system and allows the operator to view the biology within the system in real-time on a computer or mobile device.
“Our plan is to form partnerships with leading waste-water groups in Europe and North America and we hope to install 15 of them in the next year, starting in May,” said Kiely.
In a statement, the two investors said the demand for systems that treat and clean water is growing around the world and IWT fills a market need by providing systems designed for outlying areas.
“There is increasing need and demand for sustainable, reliable and cost-effective solutions for waste water treatment and water purification,” said Alex MacBeath, CEO Island Capital Partners. “Island Water Technologies Inc. has developed innovative products with significant global market potential. We are pleased to be investing in Island Water Technologies as it begins to commercialize next generation solutions.”
Natural Products Canada CEO Shelley King added that the aspect of the funding round that pleases her is the way so many parties are contributing to the ecosystem for such companies. “The various players working at multiple levels to guide and support promising companies like IWT is the thing that is putting Canada on the map. We’re proud to be a part of that system,” she said.
IWT announced last month that it would attend Imagine H2O, which involves spending time in San Francisco, New Orleans and Las Vegas. Kiely said he hopes to use the program to deepen relationships with large corporations that back Imagine H2O and to work on a Series A financing round.
“Imagine H2O -- that was a big coup for us,” said Kiely. “I’m not a big fan of general accelerators, but I am a fan of accelerators that are targeted at the industry you’re working in. And this is the world’s leading accelerator for the water industry.”