The next big thing: Solving global water scarcity

A lot of the facts regarding water scarcity are well-known, such as the notion that only 1% of all water is actually drinkable. And yet, we tend to treat it as if it's an infinite resource, with massive quantities literally being flushed down the toilet every day.

This wastefulness is magnified when considering that vast amounts of the world are still in need of water. Worldwide, 3.6 billion people—nearly half the global population—live in areas that experience water scarcity at least one month each year, according to UNESCO research, with that figure set to increase to up to 5.7 billion by 2050.

A problem on a global scale

This need is only going to rise, with the world's population expected to grow to 10 billion by 2050—and with rapidly ongoing urbanization, it's clear that the problem is likely to be further exacerbated and become unsustainable.

"Why do we simply accept the fact that in Europe everyone uses around 200 liters of water per day?" asked Mehrdad Mahdjoubi (pictured), an industrial designer and the founder of Orbital Systems, when speaking to PitchBook recently.

The startup counts angels such as Niklas Zennström as backers and has the daunting ambition to save the world's most precious commodity. Mahdjoubi's company received a €15 million loan from the European Investment Bank late last year, in addition to the £15 Series B they secured in 2017. This brings the total sum the Malmo-based business has raised to date close to €40 million.

Mission to Mars

Before all that, however, Orbital's beginnings can be tracked all the way to outer space.

Mahdjoubi was part of a group at NASA tasked with envisioning the entire ecosystem required for a journey to Mars, and the potential following migration to the red planet by humans.

"My mission was to create the optimum way of water use, and one of the ways you do this is by looking at existing models and trying not to repeat the mistakes," the founder said. "My 'Eureka!' moment was when it became blatantly obvious that adapting our existing model to Mars simply wouldn't work."

Mahdjoubi and his team at Orbital have developed a shower application that monitors the water going down the drain and purifies and recirculates it in a closed loop almost instantly. This, the company says, reduces the amount of water and energy used by up to 90% and 80%, respectively. 

While the figures may differ somewhat, the general consensus, which Orbital agrees with, is that a typical shower lasting around 10 minutes will require around 100 liters of water and about 5 kilowatts of energy to heat the water to body temperature. If we assume we spend one, or even two, of those 10 minutes using body washing products and shampoo, that leaves eight minutes—or 80 liters—of reusable water, which we now just waste but could reuse.

"It's madness that we are not doing this already," Mahdjoubi said.

Scaling fast

The solution itself is quite applicable, particularly to places such as hotels, residential and corporate real estate, university dormitories and gyms— anywhere were we shower and use large quantities of water that could be filtered, purified and reused for different applications. Those aforementioned 20 liters of water contaminated with shampoo or soap might not be good enough to drink again, but they could be used in a dishwasher or to rinse laundry.

Two years ago, Mahdjoubi asked Marten Öbrink (pictured), a serial entrepreneur with three IPOs under his belt, to come and work for him as CTO in a bid to drive the company's next phase of growth.

"I know how to build companies and how to grow companies," Öbrink told PitchBook. "What we put together in this shower is not rocket science. We take existing technology, assemble it and ship it to our clients.

"That is actually not that demanding. The really tricky bit is making it easy to install—regardless of whether you are dealing with a system in the US, Europe or Asia—and easy to certify."
   
The question also applies to water system ages—a Victorian-age London waterway being much different to one in, say Dubai—but Mahdjoubi doesn't see this as a hindrance. Indeed, the company is looking beyond land altogether.

"We are in developed talks with governments around the world, but the closest we currently have to building a new city are cruise ships, which can have around 6,000 rooms and a similar number of showers," Mahdjoubi said. "By using our technology, they can decrease the size of their desalination plant and gray water tank, which in turn frees up additional space for cabins, the revenue side of the boat. There are huge infrastructure benefits, which both clients and investors understand within a couple of minutes."

Headwinds

As with every new venture, it's not all smooth sailing. The sheer scale of the problem the company has set out to solve is daunting in and of itself, but add in the complexity and the fact that in order to really address it, a product such as Orbital's would need to be tied into a multifaceted and layered program, and you get a sense of what the founder is facing.

But there are also more mundane challenges, including pricing. An Orbital system currently retails for around $5,000, which sounds like a significant upfront cost if you are thinking of installing one unit at home. Mahdjoubi, however, believes this is not the right way to look at it, since 99% of the company's current business is B2B. So, if Orbital sells 15,000 units to one real estate developer, this will come with volume discounts.

The right backers 

Founded in 2012 in Sweden, Orbital now has clients stemming from all of the previously mentioned sectors and more some, including recreational vehicles and luxury yachts. The company also boasts a list of prominent Scandinavian backers but is looking to expand that group as it scales internationally.

"We have been in the luxurious position of being able to choose our backers for the last four years," Mahdjoubi said, adding the investors they intend to bring onboard need to have a strategic angle and the capability of Orbital leveraging their network. "We have found that investors holding real estate is a clear advantage, since they understand the benefits of the product, and for them there is a commercial benefit of using our technology."

A global solution

Öbrink believes the company will be profitable within the next two years and stressed the importance of it remaining a standalone business.

This appears to make strategic sense once you understand how interconnected the applications can be. 
Imagine a property where you have four taps, one toilet, one shower and a dishwasher. You would apply an Orbital system with six output modules and several drains—one per application. The system would recognize when you are using the shower and the level of water clarity required. The water can be treated and then used according to that requirement. So, if the product were applied to a house, hotel or office block, it becomes clear that potentially millions of liters of water can be saved and reused continuously, without investing millions in desalination and water purification projects.

Selling the business to, say, a washing machine manufacturer would see the technology only be adapted to that appliance—something Orbital wants to avoid due to its far-reaching ambitions.

Building a product from scratch, testing and refining it over years, and then finally selling and shipping it in large quantities is not easy. But, according to both Mahdjoubi and Öbrink, that is not the biggest headwind they are facing.

"People get this immediately and want it," Öbrink said. "What is difficult is that countries have different legislation and regulations, so the challenge is not only a commercial and technological task, it's legal, it's certification, it's operational. ... Dealing with so many struggles across different geographies all at the same time because we are growing so fast—that's the real challenge."

Yet the challenges will all have been worth it if the technology succeeds, as it is becoming increasingly clear that we can no longer treat water as something we can literally just flush away in large quantities if we want to continue inhabiting the planet.

"If we get this right, we will be busy for the next couple of years and [have] done some good for our planet along the way," Mahdjoubi said.
 

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