Halosource, Maker of Low-Cost Water Purifying Technology, Cracking Consumer Market In India

7/3/08Follow @xconomy

A million people in India are getting clean, cheap drinking water every day because of technology from a little company in Bothell, WA, that few people in the Northwest have ever heard of.

The company, Halosource, has started getting traction in the Indian market this year with its technology that makes water safe to drink. About 200,000 water purifiers have been sold there that use the company’s proprietary method for killing bacteria and viruses, through a partnership with Eureka Forbes, according to Halosource CEO John Kaestle.

The problem of contaminated drinking water—and the business opportunity for anyone who can solve it—is enormous. About one-fifth of people on Earth lack access to safe drinking water, a condition that led to the death of 2.2 million people in 2004, according to the United Nations. The global market for consumer products to purify the basic human necessity is worth an estimated $18 billion, according to market research firm Frost & Sullivan. Tackling that market is no small goal for a venture-backed company with about 100 employees.

To get its products adopted in the market, Halosource has formed partnerships with local companies in India, China, and Brazil. The technology can come in various formats, but has gained popularity in India with a simple product that the emerging middle class can afford.

“This is a whole new product class addressing a need for a whole new consumer class,” says Andrew Clews, Halosource’s vice president for marketing and business development, in an interview at the company’s office.

The problem with bad drinking water isn’t new. Boiling water effectively kills bugs, but is time-consuming and expensive. Carbon-filtering systems (think Brita) filter out dirt, and sediment particles, but can’t kill bacteria and viruses that make people ill with diarrhea, dysentery, and numerous other nasty ailments. Chlorine tablets work, but make water taste bad.

Newer technologies like reverse osmosis or ultraviolet lights in water tanks are becoming available in China and India, Clews says, but they can cost $200 to $350 for a home system, and depend on reliable water pressure and electricity. That’s not realistic in large parts of those countries, Kaestle says.

That’s where Halosource enters. Its proprietary technology is in a cartridge about the size of a yo-yo, at the bottom of a jug. Water in the jug (about the size of a Gatorade cooler) flows down thanks to gravity. It passes through the cartridge, which is filled with polystyrene beads coated with bromine, a chemical with the germ-killing punch of chlorine but without the foul taste.

All bacteria and viruses are killed on contact in seconds. No indoor plumbing or water pressure is needed. No electricity. It can take muddy water from a drainage ditch, or a rooftop, and in tandem with a sediment filter from another company, can produce water safe enough to drink, Kaestle says.

The cost? Consumers can buy the jug-and-cartridge product, called AquaSure, for about $40 to $60. Replacement cartridges cost $7 to $10, and typically need to be replaced every six months.

Andy Dale, managing director at Buerk Dale Victor, a Seattle-based venture capital firm that is one of the company’s early backers, says the progress at the company in the last couple years has been “incredible.”

“Here you’ve got a relatively small Seattle company that is dead center in solving one of the biggest global problems there is,” Dale says. “They’re making their mark in their industry.”

The technology has caught the attention of folks at the Program for Appropriate Technology in Health (PATH) in Seattle, a Gates Foundation-funded nonprofit devoted to fostering new technologies to solve health problems in the developing world. PATH is “supportive” of the Halosource technology, and notes it “offers several advantages over traditional iodinated resin or solid chlorine in antimicrobial efficacy and water aesthetics,” said Gena Morgan, a PATH spokeswoman, in an e-mail.

Halosource has also attracted strategic investments in the past from consumer products giant Unilever, the candy company Mars, and most recently, a cleantech investment fund formed by the government of Abu Dhabi, the investment bank Credit Suisse, and the German engineering company Siemens.

It’s taken Halosource some time to focus on drinking water purification. Since its founding in 1998, the company has applied its germ-killing techniques to keep pools and spas clean. Then came storm water. Another foray was with automatically disinfected hospital bed linens. The latest variation are kitchen towels being sold at Wal-Mart that kill bugs, and don’t absorb odors.

“Focus is a challenge,” Kaestle says. “This technology portfolio really can support a number of different products. We’re in the business we choose to be in.”

Halosource will get a better feel within a year for whether water purification in developing countries is truly its biggest opportunity. Partnership talks are ongoing with about 40 different companies or organizations. The company has two applications being reviewed by the U.S. Environmental Protection Agency. If the EPA validates Halosource’s safe drinking water technology as good enough to sell in the U.S., it will be a marketing coup the company can point to in other countries. That review is expected to be completed before the end of March, said Clews, the marketing head.

A blessing from the EPA may not put Halosource on the map in Seattle, but it would open the door to a new application that could be a hit in the Northwest. Halosource has worked on plastic water bottles that hikers can dip into lakes or streams, to yield instant purified water, more cheaply and easily than existing filtering products. That sure sounds like something the folks from REI would like to get their hands on.

By posting a comment, you agree to our terms and conditions.

  • niranjan swain

    Dear Sir,
    I am anxious to know about water purification system also start a project if in my budget.kindly give me the details

  • http://www.apnaseattle.com Seattle Indian

    Water is main source for the existence of human beings. Giving or Providing clean drinking water to millions of people is great service to man kind. I take great pride in being a seattle local that such a great project has been started here and reached india. It will draw blood in our eyes seeing women in india walking miles to get a pot of drinking water that too is muddy. Hats of to you guys.

  • http://www.berkeywaterfilters.net Nate Swanson

    This sounds like a great venture. They could also think about products that could filter water for muliple people or families safely. A little bigger, but worth the money in gallons per filter would be the berkey water filters. Good job guys!