Last updated September 6th 2014

Udi Leshem is an environmental engineer with a thing for water. He was trained at Technion and Amherst and has spent the last few years bringing algae to India. Why algae? Because it saves electricity in the treatment of waste water. Something that India and many other developing nations could use. “2% of the total electricity used by India is used in waste water treatment. 90% of that can be reduced through the use of algae,” Udi told me.

Algae Startup Tel AvivAnd why India? “Because India is a huge market that’s easy to penetrate. They’re hungry for technology and very open.” Case in point, Udi’s former company, Aqwise, won the opportunity to treat the Yamuna River and provide clean water to the over 2M residents of Agra, famous as Taj Mahal’s city. “You could only do a project of that size in India. Nowhere else,” Udi said.

Better yet, Aqwise won the project due purely to technical merit, a meeting of scientists, not politicking. And thanks to it, Aqwise’s Indian partner Triveni Engineering & Industries was rated in 2010 the best water company by Sullivan & Frost and decided to do an equity investment of $4.5M in Aqwise and relocate an Aqwise employee at great expense to Mumbai. The investment was covered by a number of publications back in mid-2012, including the Globes.

These days, algae has many uses. A couple companies in Israel and France harvest it as a food additive for $10,000/kilo. “It tastes like fish,” Udi told me. At a much lower price, it serves as feed in fish farming. Countries in the developing world have high needs for algae as an agricultural fertilizer. It can also be converted to biofuel, but because harvesting algae is basically full-blown agriculture in an aquatic environment, it’s not yet economical. At least not until fracking stops making the price of oil so low. Current estimates figure algae will be a viable substitute for fossil fuels by 2025.

Aqwise might go off in those directions, but so far they focus on wastewater treatment solutions for industrial and municipal markets. The science is such: the algae produces and supplies oxygen to microorganisms that are natural cleaners. The benefits are ease of use and low risk of contamination. Basically, it’s harvesting nature to do what nature does best. And algae, especially to the cost-sensitive Indian municipality, beats needing to install new, expensive equipment to do the same thing.

Aquanos Logo Startup Tel AvivIn India “everything is possible and nothing is easy.” You can flourish there if you can thrive in chaos, which is “bad and good. There’s opportunity there, especially for Israelis.” But you have to be careful. First, you need a partner. Udi gives the example of an apostille that needed to be documented in 6 different formats, not to mention the casual acceptance of bribes in business. Udi sees it as a “social contribution.” Second, it’s best to understand the nature of the relationship with the partner. “They will promote your technology as a means to an end.” It goes without saying that their end comes first.

Despite fast growth in the beginning, Triveni has since stalled. Too many projects. Too many bets on unique applications. With Aqwise, a project to clean a river in Bangalore serving both people and factories got stuck. Udi has since moved on to his own startup, Aquanos. What has he learned? That if you’re a tech company, you need a niche application. That it’s best if the product is cheap and the labor is intensive. That negotiations are cost-driven and Indians are good at it. That interest is expensive. And, finally, that offering added value builds trust.