Stonehouse Water Technologies LLC, an early-stage Milwaukee startup that develops water purification products, has raised $1.55 million in its first funding round, the company announced today.
The funding will allow the startup, which has developed patent-pending technology for an energy-efficient water purification system, to begin manufacturing the product.
Stonehouse’s patent-pending technology provides an energy efficient water purification system for residential, commercial, and agricultural properties. The WaterPOD is contained in the size of a dehumidifier.
Mark Sellers, who sold Germantown-based manufacturing solutions company MGS Mfg. Group Inc. to Milwaukee-based private equity firm Mason Wells in 2016, was the lead investor.
“Stonehouse’s technology and team represents Milwaukee’s strong expertise in the water, manufacturing and growing technology industries,” Sellers said in a statement. “We are looking forward to a strong partnership leveraging our manufacturing and design experience with Stonehouse’s innovation and successfully piloted products.”
The company, which started in 2012, began seeking investors in August, according to Dale Kooyenga, chief financial officer, who is also a member of the state Legislature. Within a week, Stonehouse was able to secure the investment, exceeding the initial goal set by company president Hensley Foster.
Stonehouse Water Technologies, located at the Global Water Center, plans for its final manufactured product, the WaterPOD 8, to be commercially available in early 2018. The purification system can be used for residential, commercial and agricultural properties.
“We’re hoping that, by as early as 2019, we will be selling thousands and thousands of units,” said Anne Wick, vice president of community relations. “This is going to be global, it’s not just going to be local.”
In addition to manufacturing, the funding will be directed toward research and development, as well as marketing efforts, Wick said. The company has seven employees in all, having recently added two new employees.
Wick credits Stonehouse’s residence in the Global Water Center and guidance from the Water Council in helping the company secure the investment.
Stonehouse was previously part of the Water Council’s Pilot Program, an effort by Wells Fargo, Fund for Lake Michigan, and the Milwaukee Metropolitan Sewerage District to advance new water technologies from the lab in Milwaukee to demonstration sites for real-world use.
“There are exciting and fascinating things happening here in Milwaukee when it comes to water,” Wick said. “And the Water Council has been instrumental. With the exposure that we get, you couldn’t get that anywhere else.”
Milwaukee-area companies raised more than $25 million in venture capital last year, down from a spike in 2016, according to data released from the PitchBook-NVCA Venture Monitor.
The $25 million was raised by 16 companies and 10 investors. In 2016, $44.57 million was raised by 15 companies. The biggest deal of that year — $26.36 million raised by Promentis Pharmaceuticals — drove the total. The next largest was $3.45 million raised by Patina Solutions.
The 2017 total puts Milwaukee well behind the Minneapolis-St. Paul area’s $487 million in 78 deals. Chicagoland raised more than $1.83 billion in venture capital.
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Nationally, $84 billion was invested by the venture capital industry into 8,035 deals, according to the PitchBook-NVCA Venture Monitor. That’s the highest amount of capital invested into the entrepreneurial ecosystem since the early 2000s. While more capital was raised, the number of deals decreased, so each deal was worth more money.
“While the figures are comparable to the dot-com era, the VC ecosystem appears healthy and driven by different dynamics,” said John Gabbert, CEO and founder of PitchBook. “Exciting later-stage companies with strong consumer traction are commanding large rounds of financing.”
Gabbert said technologies like virtual reality, augmented reality, artificial intelligence, financial technologies and the internet of things are game-changing.
Here are the five largest venture capital deals in the Milwaukee area in 2017, according to data released from the PitchBook-NVCA Venture Monitor.
1. Montage, $8.24 million
Buy PhotoKurt Heikkinen CEO of Montage, in the company’s Delafield office. (Photo: Mike De Sisti, Milwaukee Journal Sentinel)
Montage, a Dealfield-based video and voice interviewing technology company, raised $8.24 million in 2017. Investors in the deal included Baird Capital, Beringea, Gary Comer and Plymouth Growth Partners.
The company also snagged a deal to partner with global human relations provider Randstad Holding NV. Montage has about 80 employees.
RELATED: Montage acquires video interviewing company, raises $8 million
RELATED: Montage lands global video interviewing deal with Randstad
2. Access HealthNet, $4.75 million
Buy PhotoMark Wiesman (left), chief operating officer, and Eric Haberichter, chief executive officer, of Access HealthNet, a Milwaukee startup that has developed a service that can save employers and employees thousands of dollars on a single episode of care. (Photo: Mike De Sisti / Milwaukee Journal Sentinel)
Access HealthNet raised $4.75 million. The Wisconsin Super Angel Fund and BrightStar Wisconsin Foundation both invested in the round.
The Milwaukee-based startup provides a service to help people find low-cost medical care in a bundle that’s layered over an employer’s existing health plan.
RELATED: Milwaukee startup makes health care more efficient
3. EmOpti, $4.52 million
EmOpti, a startup with technology designed to reduce emergency room wait times, raised $4.52 million. EmOpti’s technology is used in Aurora Health Care emergency rooms.
RELATED: Aurora expanding ER technology
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4. TAI Diagnostics, $1.77 million
Wauwatosa startup TAI Diagnostics raised $1.77 million. The Golden Angel Investors led the investment round. In 2015, TAI Diagnostics raised $8.2 million — the highest for a Milwaukee-area company that year. TAI Diagnostics has a blood test for determining if a heart transplant is in danger of rejection.
RELATED: TAI Diagnostics raises $8.2 million in funding to develop blood test
5. Stonehouse Water Technologies, $1.55 million
Stonehouse Water Technologies raised $1.55 million to support production of its water purifier WaterPOD 8. (Photo: Stonehouse Water Technologies)
Stonhouse Water Technologies raised $1.55 million. Angel investor Mark Sellers led the round. The Milwaukee startup has a water purification system that will be launched commercially in the spring. The WaterPOD 8 will be sold to three main markets: private wells, new home construction and agriculture.
RELATED: Milwaukee water purification startup raises $1.55 million for its WaterPOD 8