Halosource, the Bothell, WA-based maker of technology to purify drinking water in developing countries, has raised $80 million through an IPO on the London Stock Exchange.
The company is taking in about $50 million in net proceeds, while certain shareholders sold their stakes to institutional investors for another $30 million, according to Halosource’s chief financial officer, James Thompson. The deal gives Halosource a market valuation of about $158 million, according to a Reuters report. Halosource will start trading on Oct. 18.
This is a big deal, and not just for Halosource as a company. It is something that could help the firm make a bigger impact against one of the greatest of all global health problems. About one out of six people around the world lack access to clean drinking water, and this is the root cause of a variety of illnesses that kill an estimated 2.2 million people a year, according to the United Nations. But as more people emerge from poverty, businesses like Halosource are finding that consumers are willing to pay for products to give them clean water. The market is worth an estimated $18 billion worldwide, and is growing 19 percent annually, according to research firm Frost & Sullivan.
Halosource has been tapping into this emerging market over the past couple years, with a product it calls Halopure, designed to kill viruses and bacteria. When I last wrote about the company in January, Halosource said its product was being used to purify water for about 4 million people in India. That’s about twice as many people as how many were using it a year earlier, the company said.
The new capital will be used to help Halosource expand its existing business in India and China, as well as branch into new markets in Brazil and Eastern Europe, Thompson says. The company generated almost $12 million in revenue last year, and is on pace to grow by 40 to 50 percent this year, he says. Halosource now has 110 employees, and with the new money, it plans to “significantly” increase hiring in the U.S. and overseas, he says.
“This is really about getting more working capital for a growing business,” Thompson says.
Halosource most recently raised $10 million in venture capital in January, led by Prime Partners Asia Merchant Capital of Singapore. Halosource had a long list of investors prior to the IPO, including Credit Suisse, Siemens, the Abu Dhabi Investment Authority, and a few well-known Seattle investors—Alexander Hutton Venture Partners, Montlake Capital, and WRF Capital.
The company chose to go public in London mainly because of its history as the financial “center of the universe” for water-related technology and projects, Thompson says. The pool of investors there who are interested in clean water is much bigger than it is in the U.S. While the company has investors in the U.S. who understand what it is doing, clean water isn’t necessarily the flavor of the moment that will get a company on CNBC.
“We got a very warm reception in London,” Thompson says. “You have folks who have actually been to India and China as opposed to those who have just seen it on TV, or maybe read about it in the Economist, like you sometimes see here in the U.S.”
