Thane Kreiner, in the prime of his professional life at 50, could be doing pretty much whatever he wants in Silicon Valley’s biotech industry. But about a year ago, he took a job that offered him a big cut in salary, no stock options, and no performance bonuses.

The lure? The chance to help build businesses in the developing world with the potential to make a difference for 1 billion people.

“When I applied for this job, I went to the provost and said, ‘Look, I won’t give you new theories on how to change the world. I actually want to do it,” Kreiner says.

Kreiner has been pursuing this bold goal over the past year as the executive director of the Center for Science, Technology & Society at Santa Clara University, about 40 miles south of San Francisco. The signature program he’s been working on there, in its ninth year, recruits entrepreneurs from the developing world for an 8-month mentoring program to help them figure out how to turn an already good tech-based small business into a great big one. Ideally, Santa Clara wants to help amplify ideas for things like rural electrification or clean water, which could help hundreds of millions of people lift themselves out of poverty.

Plenty of people have caught the bug for social entrepreneurship, but few people come at this emerging field with a background like Kreiner’s. He’s got a Ph.D in neuroscience from Stanford University, plus a Stanford MBA. He spent almost 15 years rising through the ranks at Santa Clara, CA-based Affymetrix (NASDAQ: AFFX), the gene-chip pioneer. The last few years, he co-founded or served as CEO of four different leading-edge biotech startups, including San Francisco-based Second Genome, Seattle-based Presage Biosciences, and South San Francisco-based iPierian. With his network of contacts in the venture world, he easily could have done the next hot thing in stem cells, personalized medicine, cancer diagnostics, you name it.

Corey Goodman, the prominent biotech entrepreneur and longtime friend and mentor of Kreiner, said he’s keeping an eye on Kreiner’s new nonprofit endeavor. “It is a very important program, and Thane is the perfect person to lead it. He has the passion and ability to make it a success,” Goodman says.

The program at Santa Clara University goes back to 1997, and its signature program, the “Global Social Benefit Incubator” got its start in 2003, before many universities had sought to tap into the growing interest in social entrepreneurship, Kreiner says. The idea of the incubator is essentially to identify entrepreneurs with proven technologies, and proven business models, who need some mentorship to scale up their companies to make a bigger difference, Kreiner says. The program matches up about 20 of these entrepreneurs from around the world with Silicon Valley VCs and entrepreneurs who help the startups define their value proposition, define target market segments, etc., over the course of an 8-month program. The program culminates in a 2-week boot camp in August every year, in which the entrepreneurs make their pitch for additional capital in front of an audience of 300 people, and a panel of judges that provide “American Idol” style instant feedback.

Results, like in many socially minded nonprofits, can be pretty squishy and subjective, unlike the hard reality of an audited for-profit income statement. Still, the program has racked up … Next Page »

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If you were to look under the hood of any big-name IPO these days – such as LinkedIn, Pandora, and someday, Facebook – you’d see a highly sophisticated coordination of capital sources that fueled each to that highly coveted spot: Seed or “Angel” money that got the idea off the ground was followed by early-stage venture capital investors who percolated the company to viability, making it attractive to up-round VC investors and maybe some “mezzanine” financiers. It’s all very integrated, deeply “vertical” and it’s why the $50 billion-a-year U.S. venture market is the envy of the world.

Contrast that with the $10 billion raised for social enterprises that are trying to solve stubborn social problems like food security, safe drinking water, or energy access and maybe one day make a profit as well.

Here, the flow of investment capital is much more disconnected and lacking in the sort of coordinated metrics that are the lifeblood of a great investment ecosystem. Even among investors who have committed themselves to sticking out the often-difficult investment challenges of companies in remote regions and uncertain business environments, there remains only sparse coordination, awareness of one another, and utilization of the growing body of investment best practices.

Take Promethean Power, a solar powered dairy refrigeration start-up based out of Cambridge, MA that participated in the Global Social Benefit Incubator in 2010. Since 2007, they have cobbled together funding from grants, business plan competitions, equity investors and eventually the impact investors like Gray Ghost Ventures and Invested Development, which seek to create impact beyond financial returns, such as social benefits or environmental performance. At each early round, Promethean had to start essentially from scratch – meeting investors, making their pitch and keeping their fingers crossed. While they and other impact investors are to be lauded for valuing social impact, the investment sources were ‘siloed’ – each providing capital for its own mandate. New sources of capital support are now being introduced. If coordinated from the outset, these “handoffs” between funding rounds might have saved time and money for all parties, and accelerated impact.

The Center for Science, Technology, and Society addresses this need for investor cooperation and syndication in a new study that we’re releasing on July 26, Coordinating Impact Capital, A New Approach to Investing in Small and Growing Businesses.

The study, which we undertook with generous support from the Aspen Network of Development Entrepreneurs, we asked 45 impact investors over six months to share with us their investment methods, profit expectations, geographic focus, due-diligence practices, and other factors. Our goal was to unearth some knowledge that could catalyze a more coordinated, venture-capital-style system for social-venture startups.

In addition to finding some interesting trends (more on that later), we identified a series of small, important steps that could be taken now to help create a syndicate structure for socially beneficial businesses.

Among them:

* Articulate new milestone requirements that investors such as grant-making foundations can add to their award documents, which anticipate the next phase of investment. One example: in addition to quantifying job creation and product creation, foundations could also … Next Page »

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We had one pretty noteworthy acquisition in the Bio/IT community this week, and a smattering of news items from the world of global health, biotech drugs, and biofuels.

—Seattle-based Geospiza, one of the mainstays of the bioinformatics industry, agreed to be acquired by PerkinElmer (NYSE: PKI), the giant life sciences toolmaker in Waltham, MA. Terms of the deal weren’t disclosed, but there were smiles all around, as this company achieved a return for investors after 14 years in business (some of them lean years).

—PATH, the Seattle-based global health hothouse, got some good news this week when the GAVI Alliance said it has committed $100 million to disseminate a new meningitis vaccine through three more countries in Africa. PATH spearheaded the development of this new vaccine over the past decade, with support from a $70 million grant from the Bill & Melinda Gates Foundation.

—Margaret McCormick gave me the lowdown on the new startup she’s leading, Seattle-based Matrix Genetics, which is seeking to genetically modify single-cell algae organisms to make biofuels and specialty chemicals. This company is being spun out of Targeted Growth, where scientific work has been progressing the past three years. Jim Roberts, a professor at the Fred Hutchinson Cancer Research Center who advises the company, said he thinks this effort can compete with well-funded, well-known outfits like Craig Venter’s Synthetic Genomics, and Cambridge, MA-based Joule Unlimited. You can hear more from McCormick about the state of the algae biofuel business at Xconomy’s alternative fuels event on May 19.

—Halosource, the Bothell, WA-based maker of technology for purifying drinking water in developing countries, said this week its technology has secured a first-of-its-kind regulatory approval from health authorities in China. The company is now moving ahead with plans to commercialize its products in China, hoping to build on the momentum it had had in India, which enabled it to go public on the London Stock Exchange last year.

—Why are drugs getting such weird brand names? That was the question that got me started on last week’s BioBeat column, and led me to some pretty interesting answers. This column stirred up lots of votes on the best and worst drug names that have come out in the last year or so. Read on to see how your favorites did in this entirely unscientific poll.

—Speaking of interactivity, I took a little time last week to remind readers to check out our new-and-improved Xconomy fan page on Facebook. We are still experimenting a bit with this other mode of distributing the content we produce each day, and I’d love to hear your thoughts on how we can tailor this page to make it even better for you.

—Seattle Genetics (NASDAQ: SGEN) gave a pretty uneventful update in its first-quarter financial report, although I noted that it ended March with a whopping $456 million in cash and investments in the bank. Investors were probably most interested in the new brand name for brentuximab vedotin (Adcetris), which, frankly, is partly what inspired to write the column about weird drug names. In this case, brentuximab vedotin is the weird scientific name—and there are a lot weirder brand names out there now, in my opinion.

—Lastly, we had another hard-hitting guest editorial from Stewart Lyman, titled “Pharma/Academic Alliances: What the Numbers Don’t Tell You.” Stewart raised some important questions about how these deals get structured, which generated some back-and-forth commentary with Regis Kelly, the director of QB3, the organization that seeks to commercialize inventions from the University of California.

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Lots of little blurbs crossed the desk this week, along with one major blowup for a drug in the third and final stage of clinical trials.

—Seattle-based Omeros (NASDAQ: OMER) said it failed in a series of pivotal clinical trials with its anti-inflammatory drug to help patients undergoing arthroscopic knee surgery. The trials, which enrolled more than 1,000 patients from 2004 through 2010, were a big reason investors bought into the Omeros IPO of October 2009. The stock is down 39 percent since the news broke.

—An individual shareholder in Kansas kicked up a debate online after calling for a boardroom shakeup at Seattle-based Dendreon (NASDAQ: DNDN). Brad Loncar accused the company of failing to properly look out for the interests of small shareholders, and encouraged fellow readers of a popular stock message board, InvestorVillage.com, to urge the company to add one or two new board members to represent those interests. Loncar says he has received some support in his effort, along with plenty of vocal criticism.

—Bothell, WA-based Halosource, the maker of technology for purifying drinking water in the developing world, introduced three new products that consumers use at home. These are powered-water pitchers, or a gravity-based water container that use Halosource’s technology for killing viruses and bacteria. The company made its initial inroads into developing world markets by selling a replaceable cartridge with its technology that works with devices made by other companies.

—Vancouver, BC-based Tekmira Pharmaceuticals made headlines a few weeks ago when it accused its partner, Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) of misappropriating trade secrets related to the delivery of RNA interference drugs into cells. Now Alnylam has formally responded to the allegation in court, saying it plans to fully defend itself.

—Seattle-based Oncothyreon (NASDAQ: ONTY) said this week it has started a mid-stage clinical trial of drug for brain cancer, PX-866, which is designed to work against one of the high-profile molecular targets in cancer biology—the PI3 kinase. The study is enrolling 30 patients at seven sites in Canada.

—This week’s BioBeat column was about antibiotics, and why more biotech entrepreneurs should take this field seriously. I listed a few promising companies I’ve covered in this business all over the country, but couldn’t think of a single example of an antibiotics company from Seattle. If any readers out there have an idea why that is—or can alert me to some promising company I overlooked—please enlighten me at ltimmerman@xconomy.com.

—The University of Washington’s Center for Commercialization said last week it has added five new people to its roster of entrepreneurs-in-residence, who scout for university technologies with business potential. Ron Berenson, the former CEO of HemaQuest Pharmaceuticals, and Stephanie Amoss, formerly of Pathway Medical Technologies, are a couple of the new additions with expertise in biotech and medical devices, respectively.

—Bothell, WA-based AVI Biopharma (NASDAQ: AVII) said it has raised $30 million through a stock offering. The company followed up a few days later to say its underwriters exercised their options to buy extra shares, meaning that AVI netted about $32 million after paying expenses. AVI said previously that it entered this year with about $34 million of cash in the bank, and a plan to spend about $23 million to $28 million of its cash on operations.

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Halosource, the Bothell, WA-based maker of low-cost technology for purifying water in the developing world, said it has introduced a new line of clean water products that consumers can use in their homes. The new products—called Waterbird, Waterbird Premium, and Waterbird Elite—will come in the form of powered water pitchers, or a gravity-based water container that contains the Halosource technology for killing viruses and bacteria in water. The company has made its initial inroads in consumer markets in India, China, and Brazil, by making replaceable cartridges that work with devices made by other companies. Halosource went public on the London Stock Exchange a year ago, raising about $80 million for expansion.

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Quite a few Seattle-area companies are tackling some ambitious projects that are all about water. I’m talking about clean drinking water, industrial water treatment, and innovative hydropower. Insights on all of that had people taking notes and asking plenty of questions at a cleantech confab Friday.

The event was organized through the Washington Clean Technology Alliance and hosted at the UBS offices in downtown Seattle. The three companies on hand each deal with a different facet of the world’s most vital resource, so you might think they don’t have much in common. But they all see big business opportunities in the years ahead.

Seattle-based Hydrovolts is headed by affable hydropower entrepreneur Burt Hamner. The company focuses on pairing next-generation hydroelectric systems with an ancient technology: canal systems.

Hydrovolts‘ products are small-scale turbines that bob below the surface in a canal or other waterway and create electricity as the water passes by.

Traditional hydropower, which the Pacific Northwest has a lot of experience with, needs dams and big reservoirs to generate enough speed in huge electric turbines.

But Hamner says his in-line turbines can now generate power from much slower flows because of recent advances in generator technology. He says that’s leading to the potential for the first broad adoption of smaller, in-stream hydropower devices.

“I can’t tell you what the growth rate is, because no one’s ever done it,” Hamner says.

Depending on the water conditions, Hydrovolts’ system can generate … Next Page »

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One of Seattle’s biotech mainstay companies had an unceremonious ending this week, while another took a step ahead toward national prominence.

—New York-based pharma giant Bristol-Myers Squibb (NYSE: BMY) said this week that it had essentially clinched its takeover of Seattle-based ZymoGenetics (NASDAQ: ZGEN) by purchasing 95 percent of the company’s shares at $9.75 apiece. Once the final paperwork is in, we’ll find out how many of the 320 Zymo employees it plans to retain.

—Seattle Genetics (NASDAQ: SGEN) took a major step ahead this week, when it said its “empowered antibody” drug passed its second straight clinical trial with flying colors. This treatment, brentuximab vedotin, showed it could shrink tumors in a stunning 50 out of 58 patients (86 percent) with a rare and aggressive form of cancer known as anaplastic large cell lymphoma. This came just a few weeks after another study showed the treatment shrank tumors in about three-fourths of patients with Hodgkin’s disease. More details are coming out in December.

—Halosource, the Bothell, WA-based maker of technology to purify drinking water in developing countries, raised $80 million this week in an IPO on the London Stock Exchange. The company plans to use the cash to expand its presence in India and China, while branching into new markets like Brazil and Eastern Europe.

—From the world of health IT, I had an interesting update from Seattle-based Appature. The company—which markets software to big pharma, medical device, and health technology companies—hired prominent startup attorney Eric Koester to help manage its growth. CEO Kabir Shahani says the company needs someone like Koester to manage a lot of existing contracts, now that Appature has sold its product to almost half of the nation’s top 10 healthcare companies.

—VentiRx Pharmaceuticals, the biotech company with operations in Seattle and San Diego, said this week its experimental immune-boosting drug passed its first clinical trial as a treatment for allergies. This drug, made as a once-weekly nasal spray, has the potential to treat and possibly even prevent allergies, the company says. VentiRx is now on the prowl for a big drug company that wants a piece of this product, which could potentially be sold to millions of people in the U.S. and around the world.

—Lastly, I was pretty psyched up to announce our next big event at Xconomy Seattle. This gathering, called “Xconomy Forum: Biotech’s Back in Seattle” will bring together the CEOs of Dendreon, Seattle Genetics, Calistoga Pharmaceuticals, and Alder Biopharmaceuticals for a panel discussion about how Seattle can continue to build on some of the newfound momentum in the local industry. If you’d like to attend this event, you can register by clicking here. See you on November 29.

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Halosource, the Bothell, WA-based maker of technology to purify drinking water in developing countries, has raised $80 million through an IPO on the London Stock Exchange.

The company is taking in about $50 million in net proceeds, while certain shareholders sold their stakes to institutional investors for another $30 million, according to Halosource’s chief financial officer, James Thompson. The deal gives Halosource a market valuation of about $158 million, according to a Reuters report. Halosource will start trading on Oct. 18.

This is a big deal, and not just for Halosource as a company. It is something that could help the firm make a bigger impact against one of the greatest of all global health problems. About one out of six people around the world lack access to clean drinking water, and this is the root cause of a variety of illnesses that kill an estimated 2.2 million people a year, according to the United Nations. But as more people emerge from poverty, businesses like Halosource are finding that consumers are willing to pay for products to give them clean water. The market is worth an estimated $18 billion worldwide, and is growing 19 percent annually, according to research firm Frost & Sullivan.

Halosource has been tapping into this emerging market over the past couple years, with a product it calls Halopure, designed to kill viruses and bacteria. When I last wrote about the company in January, Halosource said its product was being used to purify water for about 4 million people in India. That’s about twice as many people as how many were using it a year earlier, the company said.

The new capital will be used to help Halosource expand its existing business in India and China, as well as branch into new markets in Brazil and Eastern Europe, Thompson says. The company generated almost $12 million in revenue last year, and is on pace to grow by 40 to 50 percent this year, he says. Halosource now has 110 employees, and with the new money, it plans to “significantly” increase hiring in the U.S. and overseas, he says.

“This is really about getting more working capital for a growing business,” Thompson says.

Halosource most recently raised $10 million in venture capital in January, led by Prime Partners Asia Merchant Capital of Singapore. Halosource had a long list of investors prior to the IPO, including Credit Suisse, Siemens, the Abu Dhabi Investment Authority, and a few well-known Seattle investors—Alexander Hutton Venture Partners, Montlake Capital, and WRF Capital.

The company chose to go public in London mainly because of its history as the financial “center of the universe” for water-related technology and projects, Thompson says. The pool of investors there who are interested in clean water is much bigger than it is in the U.S. While the company has investors in the U.S. who understand what it is doing, clean water isn’t necessarily the flavor of the moment that will get a company on CNBC.

“We got a very warm reception in London,” Thompson says. “You have folks who have actually been to India and China as opposed to those who have just seen it on TV, or maybe read about it in the Economist, like you sometimes see here in the U.S.”

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Each decade produces new insights into science, especially life sciences, where we are learning more about ourselves. As our society becomes increasingly dependent on its scientific legacy, it becomes more and more important that each new generation understands the role of science in our lives. However, the accumulation of facts can be daunting to students and educators alike. How do we meet the challenge of educating everyone to understand the role of science in our lives? Fortunately, the principles of science don’t change.

Our role in science education

The Fred Hutchinson Cancer Research Center has a long history of contributing to the science education of the community in a variety of ways, formal and informal. Our Science Education Partnership program, for example, has trained hundreds of middle and high school science teachers for 20 years. Our Hutch High science symposium has exposed more than 1,000 high school students to real-life laboratory science.

One might wonder why a cancer research institution like the Hutchinson Center should concern itself with K-12 education. I have been thinking increasingly about this as I transition out of the position of Center president and begin to devote more of my own time to education.

The future of humankind depends on science and technology

The answer is simply that the future of humankind depends upon implementing our science and technology in ways that can sustain a human population rapidly approaching 9 billion people on a planet that is already being exploited beyond its limits. As I become more informed about the challenges of providing clean water, adequate food, energy, health, biodiversity, education, employment and the other needs of people, I am actually hopeful that it is possible to support our population so that all people can have a rewarding life.

Science and technology do have the answers. However, we will need to make some dramatic changes in the way we utilize natural resources, and that means that people, businesses, countries and international organizations will need to reach consensus on appropriate sustainable and equitable policies. Lay people will need to understand the scientific and technical issues well enough to support appropriate policy, and lawmakers will need to think far beyond the next election.

Unfortunately, science does not come naturally to people. Our inability to generate societies that can make intelligent decisions is the biggest threat, in my mind, to our future. Unfortunately, even people who study science and teach science rarely understand science as a process. Only those of us who have spent a major part of lives doing science can really appreciate how it works. You might think I am talking about sophisticated and esoteric concepts involving complex mathematics. I am not. I am talking about humility.

But science is only part of the answer

What scientists understand, through innumerable failures and the rare success, is that science is a process that involves approaching the truth through trial and error, always realizing that you have only a part of the answer. Solving humanity’s problems will require that understanding. We must agree on goals, accept the best estimates and hypothetical solutions, work toward improvement, constantly monitor the outcomes and iteratively improve our performance.

Those of us who have learned this lesson through a lifetime of frustration studying how nature works must communicate this to the lay public. Our scientists have a critical role to play in that education and I hope that the Hutchinson Center will find a way to increase its commitment to educating the next generation.

This lesson begins in our elementary schools and in our homes. I was encouraged to pursue science by passionate teachers and I have been inspired by the science teachers that participate in our programs at the Hutchinson Center. Teachers throughout the country are striving to understand our rapidly changing world and the research community needs to come together to support that effort. Along with participating in science education programs in the community, teachers, students and parents can find links to additional resources the Hutchinson Center’s website.

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After Ultraviolet Sciences was founded in 2002, it took the little San Diego cleantech startup seven years to launch its first product. It’s a water purification device that uses ultraviolet (UV) light to sterilize microbial contaminants in drinking water.

Such UV technology has been gaining momentum in recent years as an alternative to chlorine disinfectant, CEO Ron Chaffee says. It’s a trend that might reflect the wave of interest and enthusiasm that nearly all things clean and green have been generating. Pure water encompasses an estimated $l billion-dollar global market that includes bottling and beverage plants, municipal and quasi-governmental water treatment plants, and other commercial, pharmaceutical, and industrial uses. Semiconductor manufacturers, for example, require huge quantities of ultra-pure water to rinse silicon wafers.

Using UV technology to kill germs is an idea that’s been around for 50 years, Chaffee says. Big conglomerates like GE, Siemens, ITT, and Wedeco make most of the existing UV water purification equipment. It’s been hard for UV Sciences to compete. Chaffee says they often have trouble differentiating themselves from equipment makers, even though he sees UV Sciences as more of a technology development company. Chaffee also contends that gallon-for-gallon, the proprietary tools designed by UV Sciences founder J.R. “Randy” Cooper are 75 percent smaller than existing UV purifiers, cost 50 percent less to buy, and cost 90 percent less to operate.

Even so, Chaffee describes UV Sciences as a “capitally constrained” startup in an established industry where most of the marketing is conducted through visits with customers and trade shows, which can quickly get expensive. “I don’t think our challenges are any different than any other small startup trying to break into a mature market,” Chaffee says.

Since the company opened its office in 2004, Chaffee says UV Sciences has raised $1.7 million in seed and Series A venture funding, and collected another $816,000 through a government technology transfer grant for small business.

One sign that the little startup might be onto something emerged last week, when Chaffee gave a presentation about UV Sciences to the San Diego chapter of the MIT Enterprise Forum. Sitting in the audience were two engineers from … Next Page »

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Engineering has an image problem. Sure, it’s the technical backbone of many things people use every day, from airplanes, cars, and buildings to new medicines, mobile devices, and the Internet. But it doesn’t always attract the best and brightest young people interested in solving society’s biggest problems or changing the world. That’s because people often have a narrow view of what engineering entails, or think it’s too boring, geeky, or technically difficult to pursue.

Enter the “grand challenges summit” organized by the National Academy of Engineering, which is coming to Seattle next week on May 2-3. This is part of an ongoing series of six NAE events around the U.S. this year that are meant to inspire students and rally faculty, industry leaders, entrepreneurs, and investors around some of society’s most important problems. The plan is to concentrate on big ideas like improving healthcare, producing clean energy, providing access to clean water, restoring urban infrastructure, preventing nuclear terror, and making computer systems secure.

The Seattle event features an all-star cast of speakers, including Bruce Montgomery from Gilead Sciences, Larry Smarr from Calit2 and UC San Diego, Ed Crawley from MIT, former NASA administrator Mike Griffin (now at the University of Alabama), and former NASA astronaut Bonnie Dunbar (now CEO of the Museum of Flight). They will be joined by engineers from Facebook, Google, Microsoft, and General Electric, as well as prominent scholars from the UW, including Matt O’Donnell, dean of engineering, Ed Lazowska from computer science & engineering, and Suzie Pun from bioengineering. The sessions will focus on how engineers can make better medicines, as well as better tools for scientific discovery in computing and aerospace.

O’Donnell, who helped bring the summit to Seattle, says the number of students interested in engineering has been declining for the past couple of decades—in particular, the percentage of U.S. students (compared with international students) enrolled in the nation’s graduate programs. “Engineering ain’t too sexy in society,” says O’Donnell, a biomedical engineer with expertise in ultrasound and other diagnostic imaging technologies. “A lot of folks in engineering are worried.”

He says the idea behind the grand challenges is, “Let’s excite people about what engineering can do for society. It’s not just about having your startup and making money—which is cool, and we all love that. But it’s not just the next PDA or iPhone app.” The goal, he says, is to “sexify” engineering and show that “it’s a way of thinking and analyzing systems, integrating quantitative [methods] with real-world concerns. You can build a bridge or PDA, but you can also think about sustainable systems, urban development, or how you put markets together.” (The NAE summits strike me as an adult complement to the FIRST Robotics competitions for middle-school and high-school kids, which are also about inspiring a new generation of engineers and changing the popular culture around engineering.)

The first grand challenges summit took place in early 2009 and was the brainchild of Tom Katsouleas, the dean of engineering at Duke University. O’Donnell was invited to moderate a panel on engineering new medicines. “It was absolutely a blast,” he says. “But then the kids and professionals in … Next Page »

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Halosource, the Bothell, WA-based company with a cheap and simple technology for purifying water in developing countries, has raised another $10 million in a venture financing that could be worth as much as $15 million, Xconomy has learned.

The investment is being led by Prime Partners Asia Merchant Capital of Singapore, according to Halosource’s chief financial officer, James Thompson. The financing, a Series D round, includes existing investors, although a majority of the money is coming from new investors, Thompson says. Halosource has a long list of investors that includes Credit Suisse, Siemens, the Abu Dhabi Investment Authority, and a few notable Seattle investors—Alexander Hutton Venture Partners, Buerk Dale Victor, and WRF Capital. The company has now raised about $30 million since 2007.

Roughly 1 billion people around the world lack access to clean drinking water, and this is the root cause of a variety of illnesses that kill an estimated 2.2 million people a year, according to the United Nations. But as more people emerge from poverty, businesses like Halosource have discovered they are demanding consumer products to provide them with clean water. The market is worth an estimated $18 billion worldwide, and growing at a clip of 19 percent annually, according to research firm Frost & Sullivan.

Halosource has been a pioneer in this emerging market over the past couple years, with a product it calls Halopure. The technology is now being used to purify water for about 4 million people in India. That’s about twice as many people as who were using it a year earlier, Thompson says. Halosource is privately held and doesn’t disclose its sales figures, although Thompson said the company recently recorded its first profitable month, and that it is aiming to reach sustainable profitability in the near future. The company has about 100 employees now, and will look to hire a few more with this new shot of cash.

“This is capital that will continue to fuel our growth globally,” Thompson says. “We want to build a great company around a significant need in the marketplace.”

I wrote about a big break Halosource got back in March, when it was certified as safe and effective by the U.S. Environmental Protection Agency. It’s not really that strategically important for Halosource in the U.S., where we take clean water for granted, but it was a key … Next Page »

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The last time I checked in with Bothell, WA-based Halosource in July, it was gaining momentum with a cheap, simple technology for purifying drinking water that was being used by a million people in India. Nine months later, privately held Halosource, a company with just 100 employees, appears to have a hit on its hands. More than 2 million people in India are now getting clean drinking water through its proprietary technique, and now it has its eyes on expanding into new markets in China and Brazil.

Today, Halosource is announcing another milestone to help it hit crack those markets: The U.S. Environmental Protection Agency has certified that its HaloPure system is safe and effective at providing clean drinking water. If all continues to go according to plan, this ought to help the company form more partnerships with distributors like the one in India that has turned HaloPure into a fast-growing product. I heard more about this strategy a few days ago during a phone conversation with chief financial officer James Thompson.

Clean drinking water may not sound like a big deal in this country, but something like a billion people on Earth don’t have enough of it, making this one of the biggest root causes for health disparities in developing countries. The UN estimates that 2.2 million people died from unclean drinking water in 2004. Since many countries lack basic municipal water purifying systems and sewers to keep their water clean, businesses in the developed world have their eyes on consumer products to provide clean drinking water. It’s a market that is worth an estimated $18 billion, and growing at 22 percent annually, according to research firm Frost & Sullivan.

Standard off-the-shelf products aren’t really up to this task: Carbon-filtering systems like Brita can get rid of dirt and sediment particles, but don’t kill viruses or bacteria that make people sick with diarrhea, dysentery, or cholera. Chlorine tablets can do that trick, but who wants water that tastes like that?

Some new technologies for consumers have come along in China and India, like reverse osmosis or ultraviolet lights in water tanks, although those cost $200 to $350 for a home system, and depend on reliable water pressure and electricity. That’s not realistic in many countries, Halosource CEO John Kaestle told me last summer.

Halosource, though, uses a system that depends on a power source that’s reliable everywhere, and costs nothing: gravity. The company makes a yo-yo like cartridge that sits at the bottom of a broad water jug, about the size of a Gatorade cooler. The water flows down by gravity through the Halosource cartridge, which is filled with tiny polystyrene beads coated with bromine, a chemical that kills germs like chlorine does, but without the bad taste.

“We believe HaloPure is the most important non-electric drinking water disinfection technology to reach full commercialization and regulatory approvals in the past decade,” says Andrew Clews, Halosource’s vice president of marketing, in an e-mail.

A small company like Halosource doesn’t have the cash or manpower … Next Page »

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