Why We Invested in CREW

Investment frameworks are important. We’re careful about our entry point and round sizes. But it’s also vital to recognize deal opportunities that are too good to pass up even if they don’t look like our bread and butter. So it is with CREW. We’re not going to lead a significant, oversubscribed Series A all the time. But we feel privileged to do so in this case, investing alongside Builders Vision, AP Ventures, Sony Innovation Fund, New York Ventures, Idemitsu Ventures, Kibo Invest, and family office investors to fuel CREW’s next stage of growth. We did something a little different because CREW has the potential to be a once-in-a-generation water and climate tech company. Wastewater treatment plays a massive role in the earth’s water cycle. Aging infrastructure, tighter regulations, and rising costs put wastewater operators under constant pressure.

Led by cofounder Dr. Joachim (Jo) Katchinoff, CREW’s alkalinity enhancement solution includes smart-dosing of abundant and locally-sourced minerals like calcium carbonate (also known as limestone). CREW’s patented technology improves wastewater treatment performance within weeks of turning on their systems, lowers costs, and permanently removes greenhouse gases, generating high-quality and verified carbon credits. The limestone in CREW’s solution converts CO2 into stable bicarbonate that will store in the ocean for thousands of years. CREW uses its proprietary monitoring, reporting, and verification (MRV) approach in closed-system wastewater treatment plants to quantify the CO2 removed with certainty. In essence, CREW is a bridge between real plant budgets and operations, and real carbon demand. Here’s why we led CREW’s Series A.

Better outcomes for less money

Wastewater plants usually have one way to increase their revenue: charge customers (ratepayers) more. In the municipal market (and hell, in the industrial market too), this is front and center as the cost of treatment has continued to grow, and wastewater operators are trying to get more out of aging, legacy infrastructure. In this context, CREW is a godsend. Not only do wastewater plants realise direct operational improvements (more on that below), they reduce operational costs through using cost-effective minerals and using energy more efficiently. Since CREW gives plants a way to get more out of their existing, legacy infrastructure, plants are able to delay or reduce significant capital expenditures as well.

Massive wastewater treatment process improvements

The improvements CREW drives for the wastewater treatment process are profound on a simple operational level. The highly precise dosing of carbon-negative forms of alkalinity — such as soluble, natural limestone — yields jaw-dropping results… literally. You should have seen the face of a senior water scientist at the Water Environment Federation's Technical Exhibition and Conference (WEFTEC) when he saw a video comparison of CREW’s treatment outcomes versus the status quo. CREW drives more consistent biological treatment, better nutrient removal, and improved settleability — all using a more cost-effective alternative to replace conventional alkalinity chemicals and reduce coagulants and polymers. For example, CREW helped cut pollutant levels in one facility’s effluent by ~50%, which can help keep the plant in compliance and improve the water quality of local waterways. CREW has also improved sludge settleability by 30-60% at all partner sites, improving treatment capacity and wet weather resilience. This translates up to a 50% increase in treatment capacity or in other words, the potential to defer large capital upgrades. This is a huge deal for wastewater treatment plants. Plus, CREW achieves these outcomes without requiring all sorts of mad complexity on the plant site, which is almost always a recipe for startup death. Understandably, wastewater operators do not enjoy people messing with their workflows or their hardware on site. CREW requires only a storage and dosage unit, essentially the same as is used for existing chemical dosing, and site access for deliveries. The operators do not have to learn anything new. Simplicity is key.

What wastewater facilities face

Not only are conventional chemicals expensive, volatile, and sometimes inaccessible regardless of price, they’re pain in the a*** (British spelling) to handle, store, and move. At several plants, CREW’s technology allowed the utilities to fully cut their reliance on the use of caustic soda and quicklime, and reduced polymer usage by 30% from dewaterability improvements. Plus, wastewater treatment leaders are weighing supply chain certainty more and more, and limestone is significantly more available than some of the conventional chemicals that are dependent on industries like oil and gas or sourced from places with geopolitical tension. Reducing conventional chemical use for utility operators is a very good idea.

In addition to uncertainties regarding chemical and equipment supply chains, wastewater utility owners are also facing uncertainty in the form of stricter permits. For one treatment plant, a recent permit revision would have required the facility to spend $100M+ on an infrastructure upgrade. Given an approximate timeline from funding-to-completion of up to 10+ years, the utility turned to CREW as a swiftly integrated, low-cost alternative to traditional capital upgrades, to begin optimizing the treatment process to comply with those new regulations. Given their footprint nationally, CREW’s tech is helping utilities improve the ecological health of the Long Island Sound in Connecticut and New York, the Mount Hope Bay in Massachusetts, the Chesapeake Bay in Virginia, South Platte River watershed, and the Columbia River Watershed in Oregon and Washington by reducing the risks of eutrophication and ocean acidification. If CREW were offering only these wastewater treatment outcomes, this would be a very large business indeed.

Creating the highest durability carbon credits

But CREW is also delivering carbon credits. These aren’t just any old carbon credits. Jo and his team’s MRV innovation measures permanent CO2 removal at a level of precision that is highly differentiated (and high priority) in the market. CREW’s approach quantifies CO2 removal through independent approaches with low uncertainty, utilizing the well-tracked nature of wastewater treatment systems to deliver robust and high quality carbon credits. The accuracy of verification means the carbon credit buyers know what they are paying for, to a degree that simply isn’t possible in, for example, forestry-based crediting. This reliability means CREW’s credits command a premium price, making their unit economics attractive, especially as they scale.

Diversification of market exposure for us

Building a great portfolio usually (though not always) implies diversification. We followed CREW very closely because the nature of their business model is so different from our other companies. Many of our companies reduce energy use and chemical inputs, but CREW is the first that will derive revenue streams from the monetisation of durable carbon credits with the most significant players in the CDR market like JPMorgan and Google. It’s also a good time to get in. After the volcanic interest in CDR in 2021 and 2022, carbon crediting startups are not hot in the venture market at the moment, even though their value is inevitable. Many CDR suppliers are struggling to deliver high-quality credits, and CREW is doing so at the highest level with a smaller team and budget than some other suppliers that had big funding rounds 4-5 years ago.

CREW proved me wrong fast

We missed CREW at the Seed round, and it was entirely my fault. After multiple conversations and knowing how talented Jo was, I decided that the team hadn’t understood the market well enough to know they were right. I decided there was too much to underwrite, and I was wrong. CREW was spot on about basically everything, from their understanding of utility incentive structures and process, to their ability to sell, to the proof points required, to their management of the sales cycle. Smart people figure it out fast, really fast. CREW’s 10 deployments in 2 years with some of the most sophisticated utilities in the US and Europe is mighty impressive, and it positions them exceptionally well for growth to come. CREW has achieved reference deployments that usually take 5+ years for hardware-intensive companies, in just 12 months. CREW’s commercial flywheel is very much up and running, way ahead of schedule. They proved me dead wrong. I’m grateful Jo and the team trusted us to lead their Series A round with what is a world-class lineup of investors behind them. Thank you.

Keep an eye on CREW because we think it’s going to be a monster. They’re reducing costs and improving outcomes for customers as well as aligning good environmental outcomes with the bottom line — all in one intervention. CREW offers something entirely new into an enormous global market, and it’s a privilege to put our shoulders to the wheel to help Jo and the team advance a company that is as impactful and enormous as it absolutely can and should be. Jo and all the team — welcome to Burnt Island!