EIF commits €30 million to PureTerra’s second water fund

The European Investment Fund has committed €30 million ($33 million) to Amsterdam-based PureTerra Ventures as the firm raises €150 million (about $167 million) for its second fund. PureTerra plans to back early-stage startups developing solutions for cleaner, safer and more efficient water use across major industries.

Why is Europe funding water technology?

ImpactAlpha cited one of the hottest, driest summers on record as water supplies across Europe came under strain, with knock-on effects for infrastructure and the environment. Entrepreneurs, researchers, policymakers and investors were in the Netherlands this week for European Water Technology Week, an annual forum focused on water challenges across the continent and beyond.

Marjut Falkstedt of the European Investment Fund tied the investment case to climate change and excessive consumption:

“Europe’s water resources are under enormous pressure, closely related not only to climate change but also our excessive use of this scarce and crucial element.”

She identified climate change and excessive use as joint causes of that pressure.

What will PureTerra’s second fund finance?

PureTerra’s second fund targets early-stage companies with solutions for cleaner, safer and more efficient water use in:

• Energy
• Food
• Chemicals
• Semiconductors
• Other industries

Falkstedt framed the innovation strategy this way:

“Targeting innovation in water technology that can help us to recycle, re-use or use more efficiently the water that is available, can be an important signal for both the market and policy makers.”

Her statement linked recycling, reuse and efficiency gains to signals for the market and policymakers.

Invest-NL, the Netherlands’ sovereign wealth fund, committed €10 million ($11 million) in January. That commitment, alongside the EIF’s new backing, supports PureTerra’s effort to reach €150 million for its second fund.

The EIF and Invest-NL both backed PureTerra’s first fund, which raised €73 million (nearly $82 million) in 2021. Their participation carries the same two institutions into a larger second fundraising effort focused on early-stage European water companies.

What did PureTerra back first?

PureTerra invested that first fund in 14 companies. Diamidex, a French microbial detection startup, focuses on reducing the risk of water contamination. PureBlue Water, a Dutch company, provides low-emission water production, reuse and treatment.

PureTerra will again invest primarily in European companies with deep tech hardware and AI-driven software. The fund is seeking businesses with the potential to scale commercially with industrial customers, according to ImpactAlpha’s account of the second fund’s strategy.

PureTerra’s Job van Schelven said the EIF’s backing could move proven technology beyond the pilot stage:

“With the EIF behind us, we can take proven European water technology from pilot to full-scale deployment, which is where it starts to matter for Europe’s water security and for the industry that depends on it.”

His focus was full-scale deployment for Europe’s water security and the industries that depend on it.

How much of the second fund is committed?

PureTerra has disclosed €10 million ($11 million) from Invest-NL and €30 million ($33 million) from the EIF. Those commitments total €40 million ($44 million), while the second fund has a €150 million (about $167 million) target.

The first vehicle’s €73 million raise and 14-company portfolio give PureTerra a record of deploying capital in European water technology. The renewed commitments from the EIF and Invest-NL put both investors behind a second fund with a larger target and a stated focus on industrial scale.

What must PureTerra prove next?

Van Schelven tied the new capital to taking proven European water technology from pilot projects to full-scale deployment. He said that is where the technology starts to matter for Europe’s water security and for the industries that depend on it.

PureTerra’s next test is whether it can close the €150 million second fund and turn the EIF’s backing into wider industrial deployment. For industrial customers, the outcome will hinge on whether portfolio technologies improve contamination detection and deliver cleaner, safer and more efficient water use commercially.