Here’s why Clean Energy Trust is excited to invest in Varuna Tech, a Chicago-based startup providing distribution system monitoring for water utilities.

Tap water: a marvel and a mystery

Municipal water systems are incredible. Think about it. They’re an impressive engineering feat that extracts water from a source, runs it through a treatment plant to filter and disinfect the water, and then pushes it out through a massive distribution system of underground pipes to homes and businesses so we can all enjoy pure, clean water 24/7. Do I take that for granted? Of course, I do. We all do.

As impressive as modern water systems are, exactly how pure and clean is that water? Certainly clean enough to shower in and clean enough to do the dishes and laundry. Is it clean enough to drink? I think so. Maybe. Is it pure water? Well… no. In fact, if tap water had a list of ingredients on the back of the faucet, it would read something like this: water, fluoride, chlorine, copper, lead, mercury, microplastics, nitrates, perchlorates, herbicides, traces of various pharmaceuticals, and the occasional pathogen. At certain very small levels, some of these contaminants are ok, and water utilities for the most part do a good job of ensuring the water leaving the treatment plant is safe. But what happens when that water travels through miles of old and sometimes corroded pipes made of iron, copper, and lead? We don’t know, and neither do the water utilities.

The old way to monitor old infrastructure

Water utilities today become aware of contamination issues in their distribution system when one of two things occurs: 1) a consumer calls to report an issue with their water, or 2) a periodic manual field test in which a sample is collected from one of a handful of sites and then tested in a lab indicates dangerous contamination levels. Depending on the specific contaminant, the utility may need to flush the distribution system, issue a boil advisory, and/or address immediate infrastructure repairs. In any case, the monitoring and diagnostic process is inefficient at best and dangerously negligent at worst.

Varuna provides visibility into the abyss

Leveraging off-the-shelf sensors and proprietary algorithms, Varuna offers utilities a turnkey IoT solution for real-time monitoring of water quality throughout their distribution system. The platform, sold via a SaaS subscription, provides visibility, alerts, and predictive analytics, enabling system operators to get ahead of any issues before they become major problems, while also reducing overall costs by improving operational efficiency.

Market traction in an industry in desperate need of innovation

Those familiar with the purchasing habits and incentives of regulated utilities know the sales cycle—especially for a startup—can be an endless path to nowhere. Despite this challenge, on top of the obvious challenges presented by the ongoing pandemic, the Varuna team has managed to successfully convert two pilots into full contracts, and also very recently signed an MOU with Rotoplas, Mexico’s largest investor-owned utility. They have several other ongoing pilots in the field, and there is mounting evidence that the water industry is becoming increasingly interested in adopting digital technologies to improve operations. This trend is being prompted by M&A activity being led by investor-owned utilities seeing opportunities for value creation through growth and operational efficiency.

A team that knows how to get it done

Varuna co-founders Seyi Fabode and Jamail Carter have been down this road before, having been part of two startup exits (Power2Switch, acquired by Kleiner Perkins portfolio company Choose Energy in 2013, and Uplift Data Partners, acquired by PrecisionHawk in 2018). Fabode, CEO, is a systems thinker and recognized thought leader on LinkedIn (167,000 followers!). Carter, CCO and head of sales, excels as both a leader and team player. Prior to the beginning of his 20-year career in technology and sales, he played quarterback at Division I Vanderbilt University. Most importantly, these guys know how to talk to customers, empathically understand their problems, and then design and deliver solutions that make their customers’ lives easier.

Off to a great start

Varuna, having recently closed a seed round, has the pieces in place to now move fast and build out their customer base. We are incredibly excited that Varuna is the 35th company to join the CET portfolio. If you missed their pitch at Co_Invest Cleantech on October 22, 2020, you can watch the recording here. Please reach out if you have any questions or would like to connect with the team.

Read more of Clean Energy Trust’s news and perspectives on Medium.