On Tuesday, while Israelis celebrated the release of Gilad Shalit, the Israeli soldier held captive in Gaza for five years by Hamas, the team of TaKaDu, an Israeli start-up had another reason for celebration. That same day their company was the “Company of the Year – Europe & Israel” in the prestigious 2011 Global Cleantech 100, organized by Cleantech Group in collaboration with the U.K.’s Guardian News and Media.
Established in 2009, TaKaDu is providing an innovative solution to a multi-billion dollar problem – the lost of 25-30% of the world’s water production, which is also known as Non-Revenue Water (NRW). Two-thirds of NRW is due to real losses, the result of invisible leaks and large bursts and the remaining third is due to operational issues such as faulty meters or water theft. TaKaDu provides a Software-as-a-Service (SaaS) solution for monitoring water distribution networks, which is based on complex algorithms that analyze existing online data from meters within the network (flow, pressure, etc) and external data (weather, holidays, etc). The system helps utilities by detecting, alerting and providing real-time insight on leaks, bursts, zone breaches and other network inefficiencies.
“TaKaDu is emblematic of the state of global cleantech innovation today,” said Richard Youngman, MD Europe and Asia of the Cleantech Group. “It speaks to how critical a role information technology has to play in solving the world’s resource, in this case water, efficiency challenge. And its quick rise to prominence shows the advantage of being a capital-light venture, and having a business model and a technology that even the slow and ponderous utility world can adopt quickly. Our global expert panel were strong in their praise, with admirers from California to China.”
Youngman’s comments echo TaKaDu’s belief that the current state of global water shortages is more of a water management crisis. By better managing the water distribution infrastructure, TaKaDu explains, water loss can be reduced, and so will the need for new water sources. The company started operating two years ago, backed by investment from the venture capital firms Gemini Israel Funds, Giza Venture Capital and Emerald Ventures. So far the company has already publicly announced five customers, including Thames Water, the UK’s largest water utility, and there are quite a few more that are to be announced.
I had the opportunity to discuss the opportunities as well as the challenges TaKaDu is facing with Guy Horowitz, VP Marketing of the company.
Triple Pundit: Hello Guy. Congrats on the award. Is TaKaDu the “killer app” of the water market?
Guy Horowitz: We’d like to think about it more as an ‘operating system’ for the water utility. There are different ‘apps’, or modules, serving the needs of different stakeholders in the organization – alerts would go to the operations people or leakage managers, dashboards and overviews are targeted at executives and planners, and the reporting module can be customized to meet different people along the delivery chain. TaKaDu is an enabler for many of these ‘apps’, providing basic ones ourselves and opening up an ecosystem of partners who can tap into our APIs (programming interfaces).
3p: Can you elaborate on your business model?
GH: As any SaaS / Cloud solution, the TaKaDu service is provided over the web (and using mobile interfaces), and data is received from the utilities over a secure web connection. Since it is an ongoing service, the customers pay a certain monthly fee which depends on the length of the network being monitored (‘pay-per-mile’). We sell through a network or value-adding resellers, our partners, who can assist the utility in getting started and then provide any additional support needed – so we could focus on research and development.
3p: Your offer sounds like a win-win for water companies, so what is the biggest obstacle you have in penetrating the markets? Is there a difference between the European and the American markets?
GH: Indeed, the challenges are very different across geographies. European utilities have more sensors and meters in place than their US counterparts, who may not be able to benefit from the service until they have more instrumentation in their network. On the flip side, American utilities are much more open to SaaS and cloud-based solutions than some of their more conservative counterparts in some European countries. Asian and Latin American utilities are surprisingly advanced both in data availability and embracing innovation, but their operational costs are lower so efficiencies are not valued as highly as in Europe or the US.
3p: Do you think we’ll see a growing number of IT companies providing solutions in the water market just like we see now in the energy sector? If so, when?
GH: In my role as chairman of the Smart Water Networks (SWAN) Forum, I’ve had the opportunity to speak with many industry experts and analysts who claim that the water space will see the emergence of a smart water grid, similar to the smart electricity grid. I do believe that we are quite a few years away from that, but the level of interest we see from the investor community, from large corporates, such as Cisco, IBM, GE and others, and from utilities who start understanding that SaaS and Cloud Computing can enable the efficiencies they are thirsty for – are all very encouraging.
3p: Finally, TaKaDu receives many awards – do they help you in getting more customers?
GH: We are very proud of the awards we have been getting, especially ones awarded by reputable institutions who consider them seriously. We won the World Economic Forum technology pioneer award, and that is quite significant and can get a few more doors opened. But all in all, awards are like soft drinks – they may get you going for a while but they are not a substitute for food… the most important thing for us is to keep serving our customers, and if we do a good job at it, we will keep getting the recognition in the form of awards and positive analyst coverage.
Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.