XPV Capital

Making waves in the water tech industry

When the Ontario government recently announced its plans to make the province a “clean water technology capital,” it attracted the attention of U.S. media, as well as the expertise and interest of companies—much like XPV Capital Corporation. Now, this Toronto-based investment firm is spearheading the proposed Water Opportunities Act. CBJ caught up with David Henderson, managing director with XPV Capital Corp., a firm specialized in the water sector. Read on to find out why XPV Capital in partnership with the Ontario Centre for Environmental Technology Advancement (OCETA) are making waves in the water tech industry.

In early March, when Premier Dalton McGuinty announced in his Throne Speech that his government has plans to make Ontario a leader in clean-water technology, people sat up and listened. After all, the public’s heightened interest in—and the government’s commitment to—water technologies were reinforced by a devastating incident that hit close to home 10 years ago. The industry’s growth was spurred by the Walkerton, Ontario tragedy that caused 2,500 people to fall seriously ill and seven died after the local water treatment plan failed to detect E. coli contaminations from local farms.

But things are different now; the tide has certainly turned. The New York Times recently published a glowing report on “Ontario’s Clean Water Tech Cluster” after the Ontario government introduced its plans to put the province on a path to become a global leader in water technology while solving some of the environmental challenges. “Scarcity and water quality issues are things that the global community now faces—in all regions—but specifically Ontario,” explains David Henderson, managing director with XPV Capital Corporation, a Toronto-based investment firm that is spearheading the proposed Water Opportunities Act in partnership with the Ontario Centre for Environmental Technology Advancement (OCETA).

As they play a critical role in the consultation process of this proposed law, XPV Capital Corp. is one of the few venture capital funds in the world that is dedicated to water technology companies. “We search the global water market for exciting high-growth water companies at all stages of growth to invest in,” explains Henderson. XPV Capital’s partner the not-for-profit corporation, OCETA, drives the deployment and market adoption of clean technologies and environmentally sustainable solutions.

Just weeks after the Premier’s speech, XPV Capital Corporation along with OCETA and several key organizations released a new report entitled, The Water Opportunity for Ontario. After consulting governments, universities, colleges to companies of all sizes to provide feedback on what they wanted to see in the proposed bill, the report outlines how Ontario can become a global leader in the U.S. $400 billion water industry. “Through that consultation process, they set a number of recommendations on how Ontario would want to approach the opportunity that is presented in the water sector,” tells Henderson.
“I think we’re at a very exciting point here because of all the stakeholders that have come together, at the same time. From having the political will to the interest of environmentalists, the economists and the private sector—and suddenly there’s a real opportunity over the long term. ” Henderson says of the industry’s growth.

The Conference Board of Canada estimates the global market for water technology at even more than $400 billion U.S. per year—and doubling every five to six years. “In the next 20 years, worldwide demand for water is expected to be 40 per cent greater than current supply—a crisis in the making if the world does not act,” pointed out Premier Dalton in his speech.

Now if you start to look at this scenario, Henderson says, as a prime opportunity for Ontario to become a leading world-class province it has benefits in ways that cannot be replicated. He explains further: “one of them being Ontario’s location, which sits onto of United States—the largest water market in the world.” “And [the U.S.] has some real challenges so I think there’s a real opportunity there; just as Canadian companies export goods and services we can also be exporting the next generation of water technologies much like the Trojan Technologies’ and Lyon Technologies’ of the past,” he tells.

Setting things in motion

XPV Capital is plays a critical role in acting as the catalyst for change, having worked closely with other partners to complete this report, which was funded by the Ontario government. But more importantly, perhaps is the call for action. The report suggests Ontario take specific steps in order to lead, and be recognized as a global centre of innovation and world-class provider of water technologies. Among the list of recommendations is one key point: the need to create a bold vision and commitment to the creation of the Ontario Water Opportunity Act (which was also recently announced by the Ontario government).

Not only has the proposed law drawn a lot of attention but lawmakers are also showing commitment to the initiative. “Ontario’s goal is to capitalize on the global market for water technology, create jobs and drive water conservation in the province,” Environment Minister John Gerretsen drives the message home in his response to the report. “I’d like to acknowledge this report as an excellent example of how our partners are leading the way in developing the expertise we need to be leaders in water technology,” he added.

Leading the way

It is clear that water technology is going to be one of the major areas of growth and an important means in order to deal with some of the environmental challenges. “The new technology needs to be integrated with good policy and education as well,” points out Henderson. “And that’s perhaps what is so exciting about Ontario, that there is an understanding about the importance of good policy, technology development, industry and economic development. I think water technology can really go a long way to solve some of these issues,” he says.

Moving forward with initiative, XPV Capital continues to lead and engage in an “exciting dialogue” with the government to which they have been “very responsive.” Henderson hints at new developments to be announced in the next couple of months. Stay tuned!