SWIIM, a water management technology company, is pre-marketing a $3.5 million Series A round of funding on AgFunder, the agri investment fundraising platform. It is in talks with five groups about taking the lead investor role before launching the full offering.
SWIIM, which stands for Sustainable Water and Innovative Irrigation Management, is a hardware and software company enabling farmers to closely monitor their water usage and sell unused water rights back into the market to be taken up by large corporates, other farmers and municipalities.
“It is similar to energy initiatives that enable consumers to sell energy back to the grid when using solar panels and so on,” said Kevin France, chief executive, at SWIIM.
The technology, which has been deployed in Colorado on a series of pilot sites, is preparing for its first large-scale California deployment in the Imperial Valley across around 200 farms, according to France. It has a further 400 farms identified in the region and also has interest from Saudi Arabia and Australia. The company is holding a webinar hosted by AgFunder on Wednesday.
Rob Leclerc, co-founder of AgFunder, expects between 120 and 150 participants to join the webinar, which is close to the platform’s highest number of participants, which was 138 for water technology company AgSmarts. AgSmarts raised $750,000 from a $400,000 target in December.
Both companies tackle the inefficiency of water application in agriculture. SWIIM and WWF estimate that between 25 percent and 65 percent of applied water is wasted.
“Water leaves a farmer’s water budget through methods including evaporation and crop production, flowing into underground aquifers or into a local river,” said France. “The evaporated water might return in rain or snow, but really it is gone from the budget. The lost water in some cases is used by others as it is someone else’s water right. In order to transfer saved water in return for income, one must know where all of the water is located and account for it much like you would account for monies in your chequebook.”
SWIIM aims to provide a system for farmers to measure exactly how much water they use and how. With this information they can decide to improve their agricultural practices to retain more water – using different types of soil or irrigation might reduce evaporation and improve uptake by crops, for example – and work out how much water they do not use, which can then be sold as a right to someone else.
The farmer can review the options on a desktop application and submit his data and plans to SWIIM for monitoring. While SWIIM can provide a marketplace to trade unused water rights, in many regions there is already a bustling water rights market so it won’t be necessary, according to France.
The company worked with the US Department of Agriculture and the Colorado State University to develop the algorithm over four years. Farmers are likely to be paid incentives by the government to use the system and improve water usage in their region, according to France. He also estimates that a farmer with 500 acres could generate about $125,000 in revenue if they free up between 25 percent and 40 percent of their water budget. This figure is after SWIIM has been paid for the technology and a fee of up to 20 percent, or $20,000, based on that extra revenue.
The system will also decrease the amount of “buy and dry” transactions, where municipalities buy water rights from farmers, leaving much land fallow and unused.
“There is pressure for cities to stop buying and drying because it can put local farming communities out of business,” said France. “SWIIM can help to equalise the market a lot more.”
SWIIM has raised $3.7 million from angel investors since inception.
The new capital will be used to bring the company into a cashflow-positive position and allow it to deploy the technology further into Colorado and California, according to France.