In this BlueTech Forum presentation, Menno Holterman (introduced by Steve) outlines Naesta Holdings’ approach to generating returns in the water‑technology sector. He describes how the market has shifted from a clear hierarchy of corporates, mid‑size firms, and startups to a landscape dominated by a flood of university‑spun startups and a shrinking mid‑market. This creates a "valley of death" financing gap and leaves many €15‑30 million revenue companies stranded without growth pathways. Naesta’s model tackles these challenges by combining three growth levers – implementation, internationalisation and innovation – with shared operational infrastructure, access to capital, academic networks, and expertise. He illustrates the model with recent acquisitions: Nihaus (a medium‑size player active in 50‑60 countries) and Excellent Ozone Solutions (a Dutch ozone‑technology leader). By leveraging Naesta’s engineering, procurement, and market‑access resources, these firms can accelerate time‑to‑market and expand globally. The strategy focuses on industrial water customers, whose sustainability‑driven ROI cycles are shorter than municipal projects, and maintains independent management teams within companies of 50‑250 employees to preserve agility. Holterman argues that this integrated, fast‑decision‑making approach positions Naesta for profitable growth over the next 10‑15 years.
Chapters
All right, Steve, thank you very much for your kind introduction. So we're going to talk about making money this afternoon. Some of you might know me and it's a privilege to be here again and we feel very honored. Of course. The BlueTech forum decided to, to bring this event to Amsterdam this year. As I was interviewed last year about Norit, we have started a new venture, Naesta, and together with the largest private equity company in the Netherlands, we are currently investing in the water space, especially on water technology. And while we were preparing ourselves, I got a lot of questions, of course from Steve, some of you, you will know him, he's a demanding guy and he was really pushing me. Why do you believe you can make money in the water tech space? And I said listen, we have a little experience. My personal experience goes back about 15 years. We believe that if you really analyze what the opportunities are in the industry, that there's a very interesting future ahead of us. Look at some, if we look traditionally to the water technology space, let's say 10 years ago, it was a clear industry. There were some major corporates, there was a somewhat larger group of medium sized companies and there were some startups. Some of the startups were acquired by the medium sized and some of the medium sized were ultimately acquired by the corporates. But at about 70 years ago, ladies and gentlemen, that changed. And that's what you are seeing here on the slide behind me, that there's a huge number of start up companies. There are all kind of universities which are throwing literally IP on the market, hoping to be picked up by investors, by corporates to be invested in the large companies. The corporates are getting bigger and bigger and bigger. The majority of those corporates are all listed either on an American Stock exchange or an Asian stock exchange. They're all looking for double digit growth. And the distance between those startups and the big corporates is getting bigger and bigger day after day. And at the same time we are witnessing that the mid market, the medium sized companies, the mid sized market has eroded. So that's currently an area and I personally believe it's a serious issue, a challenge for our industry which we have to overcome. Secondly, if we look to the traditional growth steps of companies, we are hearing today a lot of interesting stories about startup companies looking for pilots, looking for references to the first step of implementation of the technology. Once that's proven, you start to look for multiple customers in different geographical areas around the world. And maybe also on standardization, that's what I call the next step of internationalization. And then suddenly, after certain critical mass has been reached, then comes the third step of innovation. Innovation to boost margins or at the same time to look for diversified applications. And that's all about implementation, internationalization and innovation. If we look, I personally believe the two major challenges in our industry. One on the left side you see the typical valley of death. How do we overcome that? Valley of death? There's no bank in this world which is supporting the valley of death anymore. And we also see that there are more and more investors which are not so keen at this moment of time to really step on the left side into the venture on the left side of the valley of death. But even more important, there is another. We see multiple medium sized small to medium sized companies. 20, 15, 20 $30 million euros of revenue, which somewhere on the end of the S curve, they're stuck. Because either the owners are ready for retirement, not willing to seriously invest in another growth step, they're stuck. They don't know how to get out of Holland, for example, into the global market. They don't know how to get connected to the emerging markets around the world. They need different capital, they need different support, they need repeat customers, they need access to international markets. So what's our model? That's basically the model here. We are trying to combine those and that's ultimately what we are doing now. Our first investment was in Nihaus. NIHJ is a wonderful company, already active in 50, 60 countries around the world. Medium sized, 35, 40 million revenue, 140 colleagues around the world. But still that company has the potential to really become a global player. Like we used to do business with NORIT in almost 180 countries. We are now trying to bring NIOS from 50, 60 countries to more than 100, 150 countries around the world. At the same time, we're looking to strengthening the technology portfolio. And we're looking to companies which have the potential to really enter into the global market. And that's why we have acquired, for example two weeks ago, Excellent Ozone Solutions, the market leader in the Netherlands on advanced ozone technology. Fits perfectly. The company is just out of the diapers. They're generating revenue. They're slightly better than Breakeven. And we're going to bring them to the global market. They're marketing only in the Netherlands. We're going to help them learning the export side of the business and developing inroads into customers around the world. This we believe is a healthy model. What we are trying to do, and that's of course the magic word which Some of you already have explained this afternoon or trying to reduce the time to market from these smaller type of companies. How? Simply because within the NIHAUS organization we have an understanding about customers. We have an engineering department, we have a procurement department. We have resources available to help the smaller colleagues or the small team at Excellent Ozone to accelerate their market access and at the same time to do it in a healthy financial way and that ultimately to find an investor nowadays who will believe your blue eyes and your hockey stick type of curves in every business plan I've seen so far. It's difficult. So our model is to combine different types of organizations with different talents. Because imagine the type of talent you need in the innovation stage is different than the type of talent which you need in the more mature stage where you're looking for a more global scale of operations. So that's the model based on some years of experience in the industry which we are currently applying and which versus the basis for a long term investment and existence in this industry. So we are combining innovation, implementation, internationalization with insight, infrastructure, investment, different types of money, different types of support, access to the research and academic network. You see very often that startup companies are liaised to one university and I don't know a lot of professors who are promoting to look at other universities. They're very blindsided. We provide them access to more than 10 different universities around the world. We are helping the smaller companies to understand what the local needs are when they are exporting that technology, which for example is developed in Europe into the Far east or into Latin America where you have different requirements nowadays. And of course operational excellence in order to make sure that we can offer our customers the most competitive solution. So last but not least, how do we ultimately invest in the water business? It's of course a combination of operational excellence which we try to achieve with sharing best practices. For example, within the group we are building on the sourcing on the cost side, the multiple play of course very much important, especially if you are keen on selling your business long term and leverage on insight on infrastructure investment. So to summarize, of course we are promising to change the world and the society as a whole, our industrial customers, because that's the major target group for us, I believe. And that question I think was raised earlier today. We do support the municipal industry. About 5 to 10% of our revenue is municipal related. But we do believe that the industrial water market, wastewater market, is growing faster than the municipal market because it's simply really driven by sustainability. The license to operate of our industrial customers is a serious driver for the industry. They're all looking on a day to day basis for sustainable solutions against the lowest possible cost. And if we can show our industrial customers an ROI on some of our solutions of 18 months or one year or two years, then we can have a serious discussion about a deal. An order, which is still difficult in the municipal space where you need much longer cycles, six, eight, ten years before you ultimately will get an order. Where most of the municipal projects nowadays around the world are not awarded based on operational excellence, but still, unfortunately, on investment on capex. Important in our model is we leave the management independent of the different companies within our group because we really believe that we need to stimulate the growth within small medium sized teams. So we're not looking here for a big corporate culture and bringing everything together under one roof. We believe that the ideal size of organizations is between 50 to 250 people at one location. Last but not least, of course, we make promises to financial investors and we are very close to some of the corporates. We believe we can build platforms faster than they can. We have hardly any politics internally. We take decisions very fast. We don't need 22 signatures to ultimately get an order accepted. And that's why we believe that our model is a successful model for the next 10 to 15 years. Thank you very much.
