We are Bullish on Opportunities in Surface Water Testing & Monitoring

Mazarine is pursuing investment opportunities in companies with innovations that enable industry and society to better understand aquatic ecosystem health.

Our PoV is that one of the most compelling investment opportunities in 'water' right now is in the industry knowns loosely as Surface Water Testing & Monitoring, which is also known as Aquatic Ecosystem monitoring, or Water Resource management.

Surface water assets (lakes, rivers, etc.) are ‘unhealthy’ due to: a changing climate, increased stress on water resources, weak or unenforced regulations, ‘thin’, unused, or ‘messy’ data sets, and the persistence of analog testing & monitoring tools.

Some Context

According to the National Water Quality Inventory, 70% of lakes, reservoirs, and ponds; 78% of bays and estuaries; and 55% of rivers and streams assessed in the U.S. are impaired by pollution and do not meet minimum water quality standards. This probably comes as no surprise to those of us paying attention to environmental protection and public health & safety, but what is surprising is the persistence of analog tools and dated testing and monitoring practices that inhibit our ability to turn the tables on these trends.

Convening Our Network of Partners

In April 2023 we hosted two roundtables that brought together our network of groups focused on the wide range of surface water risks humanity faces, and where/how testing & monitoring tools can help manage these risks. Recording of the April 4 discussion here, and recording of the April 25 discussion here.

Our Vision

Mazarine’s vision is to invest in companies who are leveraging breakthroughs in remote sensing, cloud computing, and business model innovation to make it easier (ie: less mysterious, scary, and expensive) to get surface water assets in the cloud, which can improve transparency, accelerate treatment, and return them to good health. If we are successful in this our mission, our impact will be to accelerate the modernization of the testing & monitoring of their surface water assets.

Technology Focus:

Mazarine is very keen to invest in early-stage companies with technology innovations in the following verticals:

- Environmental Lab Testing: While field testing tools will improve, see below, there will always be a need to send a sample to a lab with machines to generate high-resolution numbers. Many point to the slow turnaround and the painfully analog logistics of sending samples to a lab, but we invested in SimpleLab which has brought efficiencies to this space that would have been unthinkable 10 or even 5 years ago.

- Field Tools: The need for testing/monitoring on-site has always been important, and thanks to recent innovations in edge computing, sensor sensitivity, telemetry, and cloud computing, we are very bullish on companies with handheld testing and monitoring tools. Primary ares of focus include:

• Conductivity: One of the important indicators reflecting water quality, Mazarine likes better/cheaper/faster electrode-type conductivity sensors, inductive conductivity sensors, and ultrasonic conductivity sensors.

• Turbidity: Suspended particles can reflect the pollution of the water body. Mazarine likes innovations that rely on the principle of scattered light turbidity measurement, but offer it better/cheaper/faster than incumbent offerings.

• Dissolved Oxygen: Adopting the principle of fluorescence measurement, freshwater and seawater DO sensors could possibly be the most important in-situ testing and monitoring tool for understanding aquatic ecosystem health.

• COD: A Chemical Oxygen Demand sensor is crucial in establishing the concentration of organic matter in a surface water asset. Many organic substances dissolved in water absorb ultraviolet light, and by measuring the degree of absorption of ultraviolet light by these organic substances, the content of dissolved organic pollutants in water can be accurately measured.

• Chlorophyll: Monitoring the content of chlorophyll in the water can determine the eutrophication of the water. Mazarine likes companies with better/cheaper/faster chlorophyll sensors. Chlorophyll is one of the important components of algae, all algae contain chlorophyll a, and the level of chlorophyll a is related to the quality of the water environment.

• Blue-Green Algae: These sensors play an early warning role in the reproduction of algae. Mazarine likes companies with innovations that offer better/cheaper/faster ways of monitoring phytoplankton, algal growth, water eutrophication, and early warning of algal blooms.

- Weather Forecasting Tools: While we all have access to free weather apps on our various screens, the need for high spatial/temporal resolution weather forecasting plays an important in understanding aquatic ecosystem health, informing trends, anomalies, and likely near-future challenges. We like companies with innovations that enable surface water asset owners/operators better/cheaper/faster way of monitoring wind, precipitation, temperature, humidity, and atmospheric pressure.

- Geospatial/ Earth Observation Tools: Mazarine is very bullish on leveraging remote sensing tools to gather information about planet Earth's physical, chemical and biological systems, usually employing, but not restricted to satellite and airborne sensors.

- In-situ Sensors: From buoy sensing to pier/dock-fixed sensing, Mazarine is bullish on companies with better/cheaper/faster ways of collecting water quality and quantity data on aquatic ecosystems.

Who are the customers of these tools?

Buyers of surface water testing and monitoring tools includes: water and power utilities, municipal governments, consulting engineers, lake engineers, home/lake owners associations, conservation groups, and various state/federal offices.

What we are bearish on?

So-called “Cadillac” solutions that track a "multitude of water data layers", explore complex interactions, offer holistic understandings, and build expensive digital twins. While larger, slow-moving, bureaucratic entities may eventually ‘buy’ such complex and expensive offerings, they will be out of reach for most of industry and society.

What about public data?

All surface water data is admittedly helpful; however, much of the publicly available data on lakes, rivers, wetlands, etc. is either dated and unhelpful or disaggregated and expensive to clean up. In Mazarine’s view, we need to leverage technology to accelerate the modernization of how industry and society manage surface water assets.

Is this part of Climate Tech?

Yes, as the atmosphere warms one of the ways humanity will experience a changed-climate will be via drastic changes in surface water health. This is a problem for creatures living in water, but also for public health & safety. It's 'easy' for the media to talk in terms of climate-changed-induced floods and droughts, but compromised aquatic ecosystems is of equal concern. Innovations that help industry and society understand where/how aquatic ecosystems are changing is at the heart of Climate Adaptation Tech.

What used to be expensive, can and should be easy.

Testing & monitoring tools that fit the needs of asset owners/managers via a cloud-based platform will usher in a new era of affordable modernization for aquatic ecosystems.

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We welcome opportunities to trade notes with other investors and public sector decision-makers. Contact Mazarine for a more in-depth discussion on trends and opportunities in this realm.