In this BlueTech Forum interview, Waterworld magazine host Angela Godwin talks with David Henderson of XPV Water Partners about the firm’s unique approach to investing in the water sector. Henderson explains that XPV differentiates itself from traditional private equity by being an integral part of the water ecosystem, leveraging deep sector knowledge, partnerships, and a sole focus on water‑related businesses. When building its portfolio, XPV looks for emerging niches and companies that can outgrow the market, emphasizing scalability. Henderson stresses that while technology is important, a robust business model is essential for scaling water solutions, and XPV works with entrepreneurs to align technology with market dynamics. Finally, he discusses the transformative role of IoT and data, arguing that connected technologies will replace guesswork in hydraulic modeling with data‑driven insights, creating new opportunities and disruption in the water industry.
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Foreign.
Hi, I'm Angela Godwin with Waterworld magazine, coming to you from the opening reception here at the BlueTech Forum in Vancouver, Canada. Joining me this evening is my guest, David Henderson. He is with XPV Water Partners. Thank you so much for joining us today.
Thank you for having me.
Now, a lot of times people talk about XPV as the water guys, but how do you differentiate yourself in this market?
Well, I think the biggest differentiation in this market is that we're really not private equity guys. We are actually part of the sector. We've worked hard to build our sector knowledge, our ecosystems, our partnerships. And as you know, we're solely focused on this sector. So we feel that we're actually part of the water ecosystem versus an outside financer coming in. That's why I think we get known as the water guys.
Right, that makes sense. That makes sense. So what are you looking for when you're trying to build your portfolio? What are you looking for in technologies or in companies?
You know, at the end of the day, we're obviously looking for what a lot of investors looking for. It's obviously great emerging companies, but we try to think really carefully about what are the emerging niches or sectors within the water sector itself or companies related to water processes. And that's where we focus most of our attention. Like, how do we find those companies that we think have the ability to outgrow the market?
Excellent. So let me ask you, business model versus technology, what's more important?
Well, they're both important, but, you know, one of the things I've learned probably with over my 10 years of experience now, folks, in this water sector, the business model is very important. The ability to scale a water technology in this. Sorry. The ability to scale a technology in the water sector, I think is incredibly important. And that really comes down to the business model. So one of the things we've definitely tried to do, especially with emerging entrepreneurs, is really try to help them understand, like, look, you have great technology and again, there's a lot of fantastic emerging technologies coming up, but you gotta really figure out how do you scale that in this market? Because this market has very unique dynamics.
So, last thing I want to ask you before I let you go. When we talk about connected technologies or IoT, tell me, in your opinion, what's the role that that's going to play in the water market in terms of what it could solve, the impact it could have?
Well, one of my beliefs is that when you think about water and historically, how we've built a lot of our technologies, and thesis around how you approach water problems. It's been a lot of guesswork. Okay. So hydraulic models in general are guesswork. Well, the interesting thing about IoT and data, it's going to take all the guesswork out. So I actually think we're in for a pretty interesting evolution in how we look at what are challenges and problems, because we're going to move from being guessing to understanding and having real data. And I think that's going to create a lot of really interesting opportunities and a lot of disruption. But I think both are good.
Excellent. Sounds like really exciting stuff on the horizon. So, David, thank you so much for joining us. We really appreciate it. Wish you all the best of luck going forward.
