Water may not look like money to you, but it's the next big thing on investor and research agendas in Philadelphia. Meidlinger Partners in University City is the only investment firm in the country devoted solely to water investment. The company is well on its way to raising $75 million in a private equity fund by the end of 2011. On the research side, the Water and Environmental Technology Center (AKA the WET Center), headquartered at Temple University, is positioned as a global technology hub, with grants from the National Science Foundation, the Commonwealth of Pennsylvania and others.

Here's why water is a big focus for cleantech innovation. Let's start local and go global, so you get the full picture. We don't consider water much of an issue where it's abundant in the Delaware Valley, but think about our treatment plants, infrastructure built many years ago, and ill equipped to handle some of the chemicals that now show up in every stream. Dr. Rominder Suri, Director of the Water and Environmental Technology Center, studies emerging contaminants and develops technologies to identify and treat a wide range of chemicals in water. Caffeine, for example, is everywhere. Suri says that in every stream, you will find traces of the stimulant. While that's a relatively benign contaminant on a human level, aquatic life is not so much for the buzz. A far greater regional threat is runoff from coal mining and natural gas drilling operations. Concerns about fracking are on the rise, and a big reason is the effect on water quality. In the United States, California imports its water from the Colorado River. In water scarce parts of the world, nations must develop methods of recycling waste water or build desalination plants to turn sea water into drinking water. "There is not only a shortage of water but the quality of water is generally not good," explains Suri. "Industry needs high purity water for manufacturing purposes, which are on the increase due to globalization." Hence, says Suri, the development and commercialization of water treatment technologies. The WET Center is an industry-university cooperative research center, and currently has over 30 industrial partners.

Right now, the WET Center is developing four separate technologies for future commercialization. Established in 2009 out of Temple's School of Engineering, the Center is charged with creating cost and energy efficient technologies for water and wastewater treatment, with the objective of producing both high tech solutions and future water engineering professionals. WET exists at three universities: Temple takes the leadership role, with two other WET centers at the University of Arizona and Arizona State University, and another satellite at the Questor Center in Northern Ireland. "Many VCs have established Water Funds to invest in upcoming promising technologies and companies," says Suri, who mentions WET's partnership with Ben Franklin Technology Partners of Southeastern PA.

Kevin Brophy established Meidlinger Partners with Karen Meidlinger in late 2008. The firm's narrow focus is lucrative. "We invest in private companies that are early stage and fast growing," says Brophy. "The average revenue growth in 2010 was 60 percent vs. 2009." Brophy, who quit an executive job at Aqua America to start Meidlinger, says initial investments came from families and small institutions, and is now attracting the interest of major international institutional investors. "The main reason that investing in water is important now is to address primary issues of water shortages," says Brophy. The supply of water is finite, and with simple population growth, water becomes less and less available per capita. "There is a massive need to introduce new technologies to increase water on a per capita basis as the population grows." Water efficiency is a major issue globally, yet the dynamics and factors that go into each region are different. The global water industry is estimated at $350 billion.

Brophy counts Dr. Suri as a valued advisor to his fund. One of the WET Center initiatives in the pipeline is technology which uses ultrasound to selectively destroy contaminants in wastewater. Suri describes the primary threat to clean water as unregulated contaminants which may or may not be harmful, but which have been recently detected in the environment, such as chemicals, biological agents, and nano materials, which are all added to the list of conventional water contaminants such as disinfection and industrial byproducts. When we wash shampoo from our hair or remove makeup from our faces, these chemicals affect the water supply too. The WET Center has established a state-of-the-art analytical laboratory and a treatability laboratory to find and destroy a great variety of chemicals. The WET Center's work, says Suri, will lead to job creation in the region and revenue growth for companies through technology commercialization and implementation. The WET Center aims to develop cost and energy efficient water production methods that will enhance the US industry in the global market.

SUE SPOLAN is Innovation and Jobs News Editor for Flying Kite. Send feedback here.

PHOTO (Preston Moretz, Temple University)
Rominder Suri gives a tour of the WET Center to Mike Larkin, chair of the Queen's University Environmental Science and Technology Research Center in Belfast, Northern Ireland, last year.