A Fresh Look at Smart Industrial Water

Prepared by: Arti Patel Associate, Advisory Sheeraz Haji CEO 9 August 2012

CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of Cleantech Group, LLC is strictly prohibited

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Todays Agenda
1 2

Introduction to Cleantech Group Overview of Water & Wastewater VC Trends and M&A Overview Oil and Gas Supply Chain & Drivers Innovative Solutions

Beverage Water Footprint & Corporate Stewardship Innovative Solutions

Agriculture Water Concerns & Business Drivers Innovative Solutions

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Todays Agenda
1 2

Introduction to Cleantech Group Overview of Water & Wastewater VC Trends and M&A Overview Oil and Gas Supply Chain & Drivers Innovative Solutions

Beverage Water Footprint & Corporate Stewardship Innovative Solutions

Agriculture Water Concerns & Business Drivers Innovative Solutions

cleantech.com

An influx of investments in late stage water companies is set to make 2012 the strongest year in terms of water VC activity

Cleantech VC Investment in Water & Wastewater1 $ Millions , # of deals Deal Count 600

74 61 51
$284

500

58
$403

400 $ Millions

38
300

34
$204
$181

$273

$262

200

$284
100

% of total cleantech VC
1

2007

2008

2009 3%

2010 3%

2011 3%

2012 8%

3%

4%

Includes Seed, Series, Growth Equity and Follow-on financing

Source: Cleantech Group Analysis

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Top water investors in the past two years

10 of the most active VC investors

Number of deals (06/30/10-YTD)

7 5 5 4 4 4 4 3 3 3

Signature Investments

SAIL Capital Partners

DFJ XPV

Element Partners
KPCB Virgin Green Fund Liberation Capital

Energy Tech. Ventures Khosla

Meidlinger Partners

Source: Cleantech Group Analysis

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Membrane technologies continue to attract the most investment dollars, as do wastewater treatment solutions

2012 Water & Wastewater VC investments1 $ Millions

250 $241

200

$86 (36%) $124 (52%)

Wastewater Treatment

Membrane

$159 (66%)

$ Millions

150

Municipal/ Utility

$56 (23%)
100

Biological

$74 (31%)
50

Desalination

$53 (22%) 19 16 11

Other/ Combined 2

$64 (26%)

Industrial

26
0

Filtration/ Purification Infrastructure

Chemical Smart Water

16

Adsorption

18

Residential/ Commercial

Application
1
2

Technology

Target Market

Includes Seed, Series, Growth Equity and Follow-on financings through June 2012 Other/Combined includes: Electric Current, Thermal / Waste Heat, Aeration, and Ozone

Source: Cleantech Group Analysis

cleantech.com

Todays Agenda
1 2

Introduction to Cleantech Group Overview of Water & Wastewater VC Trends and M&A Overview Oil and Gas Supply Chain & Drivers Innovative Solutions

Beverage Water Footprint & Corporate Stewardship Innovative Solutions

Agriculture Water Concerns & Business Drivers Innovative Solutions

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Water is used intensively throughout the Oil & Gas exploration supply chain

UPSTREAM
Exploration & Production

MIDSTREAM
Transportation & Storage

DOWNSTREAM
Refining & Distribution

Hydraulic fracturing Water flooding

Oil separation

Fractional distillation Chemical processing/ conversion

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Unconventional Oil & Gas exploration must address water-intensive processes and wastewater disposal concerns
Innovation that allows for

Water reuse through treatment / reinjection

will eventually lead to:

Desalinization / desulfurization of water

Maintenance / increase of oil recovery rate

Reduced use of chemicals and softeners

Reduced toxicity (and cost) of wastewater discharge

Minimization of operating cost and footprint

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Innovative companies in Oil & Gas

Developer of AERO (Activated Environment for the Recovery of Oil) System to increase oil recovery from water flooded oilfields

Supplier of containerized water treatment systems primarily for oil and gas business in Canada

Developer of waterless natural gas fracking fluid that eliminates water consumption in fracking, and enables 100% recovery of fracking fluid
Public company

Provider of mobile water treatment, desalination, enhanced oil recovery and produced water solutions for the water and oil and gas industries
$250+MM Total PIC Undisclosed

$46MM Total PIC

$9MM Total PIC

KPCB, Energy

EnerTech Capital,

2011 revenue:

Technology Ventures, GTI Ventures, Advantage Capital Partners

XPV Capital, Walsingham Growth Partners

C$160 million
2012E revenue:

investors
Mitsui minority

C$220 million

investment dated May 2012

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Todays Agenda
1 2

Introduction to Cleantech Group Overview of Water & Wastewater VC Trends and M&A Overview Oil and Gas Supply Chain & Drivers Innovative Solutions

Beverage Water Footprint & Corporate Stewardship Innovative Solutions

Agriculture Water Concerns & Business Drivers Innovative Solutions

cleantech.com

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It takes a lot of water to make

=
250 mL beer 75 L water

Where does all that water go??

95% ingredients

=
125 mL wine
Source: Lenntech, Water Footprint Network

4% packaging and labeling 1% production processes

120 L water
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Why are corporates concerned with their water use?

The Food & Beverage industry spent nearly $3.3 billion on water technologies in 20111why?
1

Expansion into Emerging Markets Cost Reduction Corporate Stewardship

Water-stressed areas Water consistency concerns Increasing cost of freshwater Increasing charges for wastewater disposal Water efficiency Endocrine disruptors
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1 Global

Water Intelligence

Innovative companies in Food & Beverage

Developer of a system that removes fats, oil and grease (FOG) from wastewater without the need for chemicals or enzymes

Developer of advanced wastewater treatment systems using proprietary algal strains, which also produce biomass as a byproduct

Provider of water systems for the production of 'ultra pure' water and water softening

Provider of water purification and disinfection technology to underserved rural and peri-urban communities in developing countries

Unknown Total PIC

Unknown Total PIC

Acquired by Amplio

$62.9MM Total PIC SAIL Capital

2011 1st Runner Up

Michigan PreSeed

for Imagine H2O

Winner of Air/Water/

Capital Fund, Invest Detroit

Filtration Group in July 2010

Clients include:

Waste Prize at Clean Tech Open 2010

Heineken, Diageo and Britvic

Partners, Dow Venture Capital, Acumen Fund, Monsanto, J&J

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Todays Agenda
1 2

Introduction to Cleantech Group Overview of Water & Wastewater VC Trends and M&A Overview Oil and Gas Supply Chain & Drivers Innovative Solutions

Beverage Water Footprint & Corporate Stewardship Innovative Solutions

Agriculture Water Concerns & Business Drivers Innovative Solutions

cleantech.com

17

What can Agriculture do to meet growing demands with shrinking supplies?

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Innovation must allow farmers to decrease their water intake while increasing their crop yields

Irrigation

Enhanced fertilizer/soil
Water Reuse

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Innovative companies in Agriculture

Developer of smart irrigation solutions for increased yields and crop production while preserving soil fertility

Developer of fully variable rate irrigation controller; programmed through PC program interface enabling remote operator control

Developer of nonchemical water and soil treatment technology that addresses water shortages and water quality issues

Developers of fielddeployable measurement tool that can give answers on soil nutrient needs

$604MM Total PIC

Unknown Total PIC

Unknown Total PIC

$19.1MM Total PIC Andreesen

Private Equity

Pilot study with

Conducted 60-day

partners include: Permira, Markstone

Precise Pivot Management Grower Group

trial with Desert Forest Golf Club, leading to full installation

Horowitz, Khosla Ventures

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Intimate gathering of water leaders Interactive, round-table conversations instead of panels Real world challenges and issues addressed Top execs from leading corporations and utilities, policy makers, key investors and CEOs of water technology companies

Several seats at this invitation-only summit have been reserved for webinar attendees.

Request your invitation now at: cleantech.com/water_invitation

Plenty of networking!

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Spend a day and a half in DC with Cleantech Group and the private companies at the forefront of clean technology innovation

Webinar attendees: save $100 through Aug 16 using discount code GCTWATER

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Q&A

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Thank You

Arti Patel Associate, Research & Advisory (415) 233-9705 apatel@cleantech.com

Sheeraz Haji CEO (415) 233-9707 sheeraz.haji@cleantech.com

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