A typical semiconductor fab uses 10 million gallons of water a day, and in the process of making chips it contaminates that water with chemicals and other toxic materials. That’s a big cost for the factory and an environmental problem. In cleaning up industrial wastewater, and allowing it to be recycled for use, Boston-based Gradiant has built a fast-growing business.
Gradiant said Wednesday it had reached a $1 billion valuation — the first water-technology startup to attain that milestone — with $225 million in funding led by billionaire John Arnold’s Centaurus Capital and New York family office BoltRock Holdings. The new investment brings the company’s total funding to more than $400 million.
More importantly, the company’s revenue approached $100 million last year and is expected to double this year, nearing $200 million. Among its customers are semiconductor giants TSMC and Micron, pharmaceutical companies Pfizer and GSK, Coca-Cola, and mining firm Rio Tinto.
“It’s become more of a national security issue, or an existential issue, to have these manufacturing capabilities and each of them needs water,” Anurag Bajpayee, Gradiant’s cofounder and CEO, tells Forbes. “We not only minimize, or in some cases eliminate, the contaminated water, we recycle it to reduce the impact on society.”
A decade ago, Bajpayee, 38, and his cofounder, COO Prakash Govindan, 39, were doctoral students at MIT investigating water purification. Both had grown up in India, and had seen how water scarcity could harm people and communities. Govindan’s research focused on a desalination process based on a humidification and dehumidification cycle that mimics the rain cycles in nature. Bajpayee had the idea of applying it to an oil field. After completing their Ph.D.s in 2012, the two spun out the concept as a business.
Because Gradiant’s early costs were so low — half the cost of existing technologies, Bajpayee says — customers were willing to give the startup a try. Soon, it gained bigger customers and launched additional water-treatment technologies. Today, Gradiant has approximately 600 water-treatment facilities and offers half a dozen different water-purification technologies for complex industrial operations. It holds hundreds of patents on those technologies.
In some cases, Bajpayee says, Gradiant can recycle 98% of its customers’ contaminated water, and do it over and over again. For a chip factory, with its 10 million gallons a day, or a pharmaceutical plant, which requires ultra-pure water, that’s a huge thing, keeping the plant operating regardless of the climate and potentially reducing both the costs of production and the plant’s environmental impact. Instead of bringing in 10 million gallons of freshwater every day to operate a fab, for example, Gradiant’s recycled wastewater could reduce the need for new water to just 200,000 gallons a day. “You cannot eliminate reliance on water, but you can reduce it significantly to increase the sustainability by a very long shot,” Bajpayee says.
For GSK, Gradiant worked up a wastewater treatment program for its large amoxicillin plant in Singapore beginning in January 2020. Wastewater from the penicillin antibiotic — a key ingredient in GSK’s drug Augmentin — is particularly hazardous and tough to manage. Gradiant extracts some five tons of waste per day from the plant’s wastewater. “To treat the sludge we were getting was extremely difficult,” says Colin McKee, GSK’s head of capital strategy and management.
With critical minerals receiving increased political attention, Gradiant’s water-treatment process is also finding new uses. Oil-field services company Schlumberger, which is an investor as well as a customer, will soon begin using Gradiant to extract the lithium required for batteries that power electric vehicles from brine instead of from rock at a facility in Nevada. “As far as we’re concerned, it’s a desalination or water-treatment process,” Bajpayee says. “We take the water out of that solution so … it concentrates the lithium brine where it becomes easier to extract the lithium from it. In most cases, we recover the water and the brine is the byproduct; here the brine is the product.”
Original Article: Forbes