By most measures, 2023 has been a down year for venture capital funding, with deals slowing amid economic uncertainty and sluggish IPO activity. VC-backed companies raised just $29.4 billion during the 2023 second quarter, according to data from Ernst & Young. That was down from $44.4 billion the previous quarter and less than half as much as the 2022 second quarter.
However, some companies have defied the trend by drawing investor interest and raising large sums even in a challenging environment. One of those companies is Gradiant, a Boston-based water technology company that achieved unicorn status earlier this year when it raised $225 million in a Series D funding round.
The round, announced on May 17, was led by BoltRock Holdings and Centaurus Capital. It brought Gradiant’s total funding to more than $400 million and its valuation to $1 billion. The latter figure secured Gradiant’s unicorn status only 11 years after launching the company.
Gradiant provides industrial water treatment solutions to various end markets, including semiconductors, pharmaceuticals, food & beverage, lithium and critical minerals, and renewable energy.
The company’s technology is designed to reduce water usage and convert wastewater into freshwater, helping some of the world’s biggest corporations operate more sustainably.
Its clients include Anheuser-Busch InBev, Coca-Cola, Pfizer, Rio Tinto, and Schlumberger Limited.
Those clients have helped Gradiant become one of the fastest-growing firms in the global water tech industry. Its annual revenue has more than doubled four years in a row, while its technology attracts investor interest.
Photo Courtesy Gradiant
“The company is led by a strong proven management team with a deep understanding of water technologies and the operational needs of Fortune 100 customers,” Craig Huff, Founder and Managing Member of BoltRock Holdings, said in a statement.
Gradiant CEO and co-founder Anurag Bajpayee told BostInno in an interview that the “criticality” of the water industry and the industries they serve helped his company complete a significant funding round despite numerous VC market headwinds.
“[It’s] not the best market out there to raise money, whether it’s for IPOs or private financing at any stage,” Bajpayee said.
But that hasn’t stopped companies from pumping money into Gradiant this year.
Photo Courtesy Gradiant
“As global manufacturing and supply chains continue to advance, they demand more and more water resources, which are increasingly rare and finite,” Centaurus Founder John Arnold said. “We are excited to partner with a company that has truly proven the ability to support these demands in an economic and energy-efficient manner.”
Gradiant was co-founded in 2012 by Bajpayee and Prakash Govindan, who now serves as chief operating officer. The pair launched the company while both were doctoral students at MIT.
Gradiant’s May funding round proceeds will be used to finance expansion into strategic markets, support growth in new geographies like the Middle East and Europe, and bolster research and development.
Photo Courtesy Gradiant
“This investment is a testament to Gradiant’s proven track record of rapidly inventing and commercializing water technologies to make a real difference in the economic and environmental footprints of our industrial customers,” Bajpayee said in a statement. “BoltRock and Centaurus share our vision and bring smart, long-term capital that will help Gradiant grow into the world’s most impactful water company.”
