This series provides weekly insights into my top startups (Pre-Seed // Seed) that are striving to make an impact across the globe.
Today we are discussing change:WATER Labs an incredibly unique startup with an impressive management team and a serious mission statement. They’re looking to bring portable, adaptable and waterless toilets to third world countries that have no toilets or toilet infrastructure. For context, poor sanitation causes of 80% of all infectious disease, 4% of deaths globally, and takes the life of one child every 20 seconds, while many others suffer developmentally from chronic infections that lead to malnutrition, stunting, and more. When flushing isn’t an option, the alternatives are dumping or hauling which are dangerous and costly, in terms of health and the cost of removing raw sewage. It means aggressive and chronic illness, and child death tolls that are far too high.
1,500 children a day die from diarrhea that is mainly caused by that lack of sanitation. Over 800 of them are under five years old.
TAM: Using a top down valuation, the TAM for change:WATER Labs sits at 2.6 billion individuals in need.
KPI Analysis: When analyzing impact investments, really it comes down to measuring the social impact the company is creating. I believe there is incredible potential for tremendous impact. The problem is a wide spread, global issue with serious implications. Solving just a few percent of the total problem would be a massive win in the KPI section.
Management: Diana Yousef, PhD, MBA, MA is a serial entrepreneur with 10+yrs experience commercializing technology for social and environmental impact in the developing world. Formerly, she consulted for McKinsey, co-founded IFC/World Bank’s Life Sciences Investment Group and the United Nations’ Inclusive Markets incubator, and was a seed-stage VC with Battelle Ventures. She co-founded: WeCyclers (social venture to clean up urban slums and create recyclables supply chain linkages in Nigeria), Immerse Global (Stanford-spin out to develop atmospheric water capture technologies), and SachSiSolar (MIT-spin out to develop revolutionary new materials to lower the cost of solar energy).
Funding History: N/A
Currently Raising: Pre-Seed
So who is the right investor for this opportunity? Well to answer that we can quickly narrow the investment to funds & angels that heavily participate in social impact investing.
Exit Strategy: At the core of this investment, investors should seek to generate social or environmental impact alongside financial return. The first step here would be to sit down and begin examination of the organization’s planned growth trajectory and an understanding of where a logical exit might occur. Modeling out case scenarios based on the ultimate goals and progress thus far will allow for some clarity on a potential exit horizon. Next, calculating the impact multiple of money (IMM) will put pre-deal impact evaluation on par with financial evaluation. To calculate IMM, simply take social benefit ($) / invested capital ($) = IMM. Be sure to account for partial ownership depending on ownership within the cap table. At a high level successful investors within impact investing can expect investment performance to be inline or even stronger than traditional venture investments. Cambridge Associates in 2015 published its first impact investing benchmark. Their study shows just how attractive the returns can be.