WaterHealth International Inc., a maker of water purification systems for developing countries, has raised $4 million in a third round of venture funding.
The investment brings Lake Forest-based WaterHealth’s total raised to more than $11 million.
Sail Venture Partners LP, which has offices in Costa Mesa and Arlington, Va., led the round. Plebys International LLC, a fund run by WaterHealth Chief Executive Tralance Addy, also invested.
Sail, led by lawyer-turned-venture capitalist Walter Schindler, primarily invests in alternative-energy startup companies. Its portfolio includes Oryxe Energy International Inc., an Irvine company that makes diesel fuel additives that cut down on engine emissions.
WaterHealth’s “clean technology” was attractive to Sail, according to managing partner Hank Habicht. Sail is looking for situations “where a breakthrough technology makes it possible to reach crucial markets in an efficient manner,” he said.
In November, WaterHealth said it received $7.2 million in funding, led by Dow Venture Capital, the Midland, Mich.-based investment arm of Dow Chemical Co.
The latest investment should allow WaterHealth to boost growth, according to the company.
“That always helps to validate what you’re doing,” Addy said about the latest investment.
WaterHealth’s “a socially conscious company,” he said.
“We didn’t start this company just because there’s an opportunity to make money,here’s an opportunity to serve a need that’s existed for a long time,” Addy said.
WaterHealth sells water purification and disinfection systems, which use ultraviolet light to kill bacteria and organisms. The company’s sold more than 450 systems, with India, South Asia, West Africa, the Philippines and Mexico as target markets.
Addy declined to disclose revenue. WaterHealth employs about 100 people, he said.
The company’s goal is to fight waterborne diseases such as cholera. Waterborne diseases typically come from water that’s contaminated by feces or urine and infected with viruses or bacteria.
WaterHealth’s piloting a program to install its water purifier in community water systems in remote, rural areas.
Systems are being built and installed in India. West Africa is another possible candidate.
The pilot program would give a community of up to 3,000 people 20 liters of safe drinking water every day.
“If you know anything about waterborne disease, it kills more people in the developing world,more children in the developing world,” said Addy, a Ghana native.
He cited figures that there were some 5 million deaths a year from waterborne disease.
The company is working to build a foothold in its markets, Addy said.
“This is obviously a huge problem and a huge opportunity as well,” he said. “We’re certainly not building a company to flip it that’s not what we’re doing.”
Still, WaterHealth would go public or consider a buyout if opportunities arose, Addy said.
As for competitors, Addy said he wasn’t aware of a company doing exactly what WaterHealth does. Companies such as General Electric Co. and France’s Veolia Environment SA include water purification in projects they do for urban areas in developing countries.
WaterHealth was founded in 1996. Addy joined in 2001. Prior to coming to WaterHealth, Addy was an international vice president at Johnson & Johnson.
Addy’s career includes stints as worldwide president and chief executive of Advanced Sterilization Products, an Irvine-based J & J; unit that makes devices and liquid solutions for sterilizing medical instruments.
Ashok Gadgil, WaterHealth’s chief scientific officer, invented the company’s water purification system. Gadgil is a senior scientist in the environmental energy technologies division at Lawrence Berkeley National Laboratory, above the University of California, Berkeley, campus. He was featured in “Me and Isaac Newton,” a 1999 documentary on scientists and their discoveries.
Gadgil invented the purification system after a 1992 outbreak of cholera that spread throughout India and neighboring countries, killing up to 10,000 people. n
