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Startup Valor Water Turns On Silicon Valley Tech For Public Water Utilities

This article is more than 8 years old.

When Christine Boyle started her company Valor Water Analytics, she didn’t expect it would be a Silicon Valley technology startup.

After all, the company, founded in North Carolina, based on her PhD work, helps public water utilities analyze their data to conserve water and increase revenue. It's not your typical photo sharing or chat app.

The company’s main product is a revenue loss detection tool that analyzes a utility's data to help identify leaks, broken meters, and other lost revenue. Clients have added an average of 2.3% of revenue by using the service. The subscription service uses software without requiring any hardware to install.

But after her company was accepted last year to present at one of the Valley's big conferences, TechCrunch Disrupt, Y Combinator partner Qasar Younis convinced her to join Y Combinator. She initially didn’t want to join the prestigious Silicon Valley incubator—having already just finished the Tumml accelerator for urban innovation startups in San Francisco. But Younis convinced her with a key phone call in Fall 2014. “I wasn't 100% convinced of how exactly Valor Water would benefit from YC and he laid out exactly how the partner-coaching would accelerate growth.”

She decided that she didn’t have contacts to raise investor funding and thought Y Combinator would be the best way to get those contacts. She ended up finding many more benefits, including mentorship and guidance from partners. “Qasar was also very clear on how YC-vetted companies had greater likelihood of funding. Looking back now a year later, I can say, everything he said was right.”

Valor Water is now raising its first venture capital funding, a process that YC made much easier for her, Boyle says.

The water industry is a classic industry ripe for Silicon Valley style disruption. Its technology is often old and inefficient, without access to Internet-based tools to instantly analyze data and make adjustments. These types of tools are now much more common in other types of businesses. Also, the industry is inefficiently organized, with more than 52,000 local water utilities across the U.S. Often each small city or town in a particular region has its own water utility. For example, about 60 water districts make up the small area south of San Francisco on the Peninsula. These tiny groups don’t have access to resources to build their own technology to become more cost-efficient. But Valor Water can provide tools more cheaply. So it is now trying to sign up all these water utilities.

While power utilities are often run by large private companies such as PG&E or Duke, water utilities are typically small public agencies. As a result power companies typically have more resources to invest in data analysis and software.

The company has generated some significant early traction - customers include Sonoma County Water Agency in Northern California, United Water in New Jersey, and City of High Point in North Carolina—and it has MOUs with six other agencies that it is negotiating towards deals. One promising distribution channel is doing deals with manufacturers that sell water meters to water districts, which will enable Valor Water to quickly sign up many new customers.

With droughts affecting a number of different areas around the country, Valor Water could also help utilities. When droughts affect an area, customers are asked to conserve and use less water. While that is a good thing, it can often mean declining revenue for water utilities. To address this, Valor Water helps utilities analyze their customers and determine if they should increase (or decrease) their fees for certain customer segments--and how to best balance their customer mix.

Valor Water also has a product that identifies water-wasting customers. Another product tracks customer data to analyze future projected trends so that utilities can adjust rate structures (for example charging certain customers more and others less). A drought tool provides detailed tracking for conservation efforts. And a cutoff analyzer analyzes potential water cutoffs to understand and prevent loss of service to customers. By modeling future scenarios, Valor Water can help utilities determine the best way to maximize their revenue. “We can identify certain customer segments that are shrinking and the risk there,” Boyle says.

Through a partnership with Oracle, Valor Water also offers a CRM platform for water utilities with consumer dashboards for their customers showing their water usage—somewhat like what Opower’s platform does for electricity.

The company can also estimate how a utility will do if a drought or other disaster occurs. “We do risk and revenue projections of how it will do under drought or disaster and how resilient they are to any number different shocks,” she adds.

Because the company’s specialty is analyzing vast amount of data about water going into homes, businesses and other locations, it stands to reason that the technology could be used for analyzing other resources being piped into homes. Indeed, while it’s focused on water at the moment, Boyle sees potential in other areas, particularly electricity, but also in natural gas or even cable service. That could greatly expand the potential market Valor. “It’s not that different than what we’re looking for with water,” she says.

Despite the Silicon Valley bonafides, Boyle doesn’t see herself as a tech executive, but rather as a water industry person. She doesn’t want to get caught up in the Silicon Valley “echo chamber” and instead wants to stay close to her customers. “For the last 15 years I’ve been a water professional or water advocate,” she says. “We don’t think of ourselves as a Silicon Valley startup. We try to think of ourselves as in the water industry. When we go to conferences we don’t usually go to TechCrunch. We hang out at water conferences.”

"Christine has such incredible industry knowledge," says Clara Brenner, CEO at urban innovation incubator Tumml. "She's just passionate about water finance, which is rare. And she makes it her business to know everything on the subject, which makes her exactly the kind of founder we like to back."

Another way Valor Water is different than many Valley startups is that she sees the for-profit company as still having a positive mission. “I want to prove out we can do both,” she says. “You can make vast huge improvement in the world. And you can also do it in a way that makes money--because we can build a rational ROI-based business that pays for itself and scales very widely.”