For BioLargo, Impact Investors Prove More Liquid than Venture Capital Funding

Many investors agree that BioLargo, a sustainable water company that uses patented technology to leverage the natural disinfectant properties of iodine to decontaminate water cheaply, is on the verge of becoming a game changer in the world of water treatment.

BioLargo, based in Santa Ana, CA, has developed a filter, known as an AOS filter, with potential for use in oil and gas, mining, shipping and food industries. Earlier this month the company publicly announced it had completed a $1 million capital raise from individual investors as part of a $5.5 million offering it began in January of this year. As of Oct. 21, it has raised approximately half of the total offering.

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And the company is evaluating additional financing options available to help propel the company from technology development into the commercialization phase. Between multiple sources of capital it is evaluating, including grants, corporate joint ventures, and investment capital, a new round of funding could exceed $10 million, Dennis Calvert tells CleanTechIQ.

Yet, while a company like BioLargo in the past may have sought traditional venture capital funding in order to take its next steps, the company is instead capitalizing on emerging investor interest in sustainability and water decontamination by family offices, sovereign wealth funds, and corporate strategic investors. These three types investors are increasingly making a commitment to sustainability.

The interest from investors compelled Walter Schindler, managing partner of Sail Capital Partners, to form a new merchant bank that will specialize in clean technology and infrastructure projects related to sustainability, such as water and energy efficiency. Schindler is the founder of Sail Capital,  a cleantech venture capital firm, and he also serves as an advisor to BioLargo. He is now working with BioLargo to help raise the additional capital.

“Sail Capital sees a growing interest in water technology investments,” Schindler said.

And Schindler would know.

His Sail Capital has developed one of the largest providers of pure drinking water to rural villages around the world, Water Health International. Schindler explained that it took nine years to get Water Health International to a strong valuation, but estimates that it won’t take BioLargo nearly that long.

Among the positives he lists about BioLargo is the low cost of production, which he says gives the company a significant competitive advantage. In addition, Schindler says the company’s iodine-based filter and technology is “significantly more effective at disinfection in deep contamination than any other technology that I have seen.”

“It’s basically killing 99.999% of all of the infections and germs and removing an equal percentage of contaminants,” he says. “So now you’ve got low cost and high impact.”

BioLargo’s technology has been proven in the lab at the University of Alberta and by such companies as Shell Canada, says Schindler.

In the end, BioLargo is structured to make a profit by solving a global problem at a reasonable cost, he said.

Even more important, BioLargo’s business focus is family-office friendly.

“Family offices are emerging as the leaders in sustainability, because they have by definition a multi-generational charter,” he says. “So if you’ve got several billion dollars and you are concerned about your children, your grandchildren, their children, you are going to want to invest in solutions that make the world in their generations materially better.”

Plus, there’s no doubt water technology continues to be popular with various types of investors.

General Electric announced this month that its water business would acquire IMT Solutions, a private company based in the Netherlands that manufactures ultrafiltration and microfiltration membranes for water treatment

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