Emerald secures €60m for water tech fund despite funding drought

Zurich-based VC Emerald has closed the first portion of its Global Water Fund II at €60m.

The fund will invest in early and late stage companies globally developing technologies spanning water reuse, digital monitoring, prediction, automation, and detection of emerging contaminants.

The fund's anchor investors are Veralto and Ecolab, two American water technology corporations. SKion Water and Oxy Technology Ventures, the venture arm of petroleum giant Oxy, also joined as LPs.

The fund has a target size of €150–180m, and follows Emerald's first Global Water Fund which closed at €100m in 2020.

Helge Daebel, partner at Emerald, said he hopes the new investment vehicle will "supercharge" the growth of water tech startups and scaleups – something the sector appears to need.

The funding gap

Global venture capital investment in water is on track for its lowest total since 2018, according to the State of Impact 2025 report released yesterday by Dealroom, ImpactCity, and Microsoft.

From reuse to monitoring – water tech startups are expected to raise less than $500m in VC funding this year. That's around 2% of the total climate tech funding, according to the report.

Water tech has long been underfunded because it’s typically capital-intensive, slow to scale, and lacks the fast returns investors expect from software or energy startups. Water’s low price also makes it hard to monetise innovation, especially since it’s often heavily subsidised.

However, macro trends like population growth, rapid urbanisation, and climate change are intensifying water scarcity – driving greater demand for smarter management in a sector that is chronically inefficient.

New tech is also making water solutions more attractive for investors. The market for AI applications in water and sanitation, for instance, is projected to grow at 26.8% CAGR to 2031.