Too Basic to Notice, Too Big to Ignore – BIV on The Derivative Podcast

Water might be the most underappreciated investment theme going. Too basic to notice, too big to ignore. $1.6 trillion of capex a year goes into pipes and treatment systems that are still, functionally, Victorian tech. Anything that big and that old gets rebuilt eventually, and early-stage companies are the ones doing the rebuilding.

Thank you to Jeff Malec of RCM Alternatives for hosting Tom Ferguson on the latest episode of The Derivative to talk about the VC opportunity in water tech. You can listen in here, or wherever you get your podcasts. It’s a wide-ranging one:

• Why water may be the most underappreciated investment theme on the planet, and what “freshwater stewardship” really means

• How $1.6 trillion in annual capex flows into infrastructure that’s still effectively “Victorian tech”

• Why utilities aren’t as slow or “dumb” as they’re often portrayed — and how consulting engineers act as quiet gatekeepers for change

• The frontier categories: subsea desalination, digital water, and leak detection

• The uncomfortable reality of simultaneously over-abstracting groundwater and underinvesting in infrastructure

• How the venture model itself needs to adapt in water — and how investors can target mid-20s IRRs while improving the most basic layer of human and economic life

Enjoy, and all feedback welcome.