Green

Kleiner makes splash with inaugural water investment

Kleiner Perkins Caufield & Byers has backed its first water-related cleantech company — a significant milestone for the firm, and a sign that the floodgates might finally open in water investing in the U.S. The lucky recipient, Applied Process Technology (APT), makes water remediation technology that removes agricultural (read: fertilizer) nitrates from well water.Europe has been leading the pack in the water space for a while now, with the U.S. opting to focus cleantech investing on renewable energy sources, transportation applications and the smart grid. And nowhere is this more obvious that at Kleiner, whose green portfolio — now 15 startups strong — includes solar installation maker Ausra, luxury electric vehicle maker Fisker Automotive and smart grid network provider Silver Spring Networks. It has also expressed interest in fuel cells, carbon accounting and clean coal, but to a lesser extent.

Clearly, the deal with APT is a break away from business as usual — though the firm hasn’t disclosed the amount of its contribution, so it’s uncertain how serious it is about the technology yet. This is also the first major firm to take an interest in the Pleasant Hill, Calif.-based company. It previously raised $1 million, hoping for $7 million more, according to a regulatory filing with the Securities and Exchange Commission. The company itself claims it has already brought in $10.5 million in equity.

The company uses bio-film — a filtering barrier that is actually alive — to remove chemicals and nitrates from the water. It says deployment will start in California, where it hopes to address the 4,000 contaminated wells in the state’s central valley, where agriculture has taken its toll on the local environment and its populace. It distinguishes itself from other remediation companies with claims that its process doesn’t produce waste water that requires more work. And it’s already active in the market, with installations at industrial sites, petroleum terminals and utility wells.

Few firms in the same tier as Kleiner have invested in water. Mayfield Fund and Sequoia Capital don’t invest in cleantech outside of the energy space, and others seem to be slow on the uptake. It will be interesting to see if this inaugural move on Kleiner’s part changes that, and if so, how soon.