Earlier this year, Valor Water Analytics (Valor) was acquired by Xylem Inc., a $13B water technology company that services utility and commercial clients across 150 countries. While this is big news in its own right within the water industry, it’s especially exciting for the Environmental Finance Center: Valor Founder and CEO Dr. Christine Boyle previously worked as a research assistant at the EFC while pursuing her doctorate in water resource planning from the University of North Carolina at Chapel Hill.
While at the EFC, Dr. Boyle led a team on a multiyear study of water utility data analytics for the state’s Urban Water Consortium. Following her time at the EFC and postdoctoral work, Dr. Boyle moved to California where we she would found Valor and work with utilities worldwide to introduce technologies that drive efficiency and set a new bar for how utilities understand and utilize data.
We sat down with Dr. Boyle to talk about Valor, entrepreneurship, and—most importantly—the future of the industry. Read on for her answers and insight:
What attracted you to the water finance field?
I guess I didn’t know it was water finance per se. I was really interested in water management and I in no way wanted to be an engineer or a civil engineer. When I started working with the Environmental Finance Center, I really enjoy the blend of financial analysis with natural resource analysis. Jeff’s classic question of “How do you pay for environmental services?” just really struck me. I ended up doing that type of work for the EFC and also for my dissertation, which was actually in China, related to how farmers make decisions over who pays for irrigation infrastructure. Just that question and how to solve it really resonated with me, so I just found a happy home for the work I wanted to do and dug in.
How did your work in leading an EFC study of water utility data analytics impact your career and professional goals?
When I graduated, I had been working at EFC for five or six years and then I actually did a post-doc at EFC because we weren’t done with the work for our water consortium. I was so heavily involved that it just made sense for me to stay on and continue that work.
I ended up starting a consulting firm when I moved to California and was doing other work—not EFC-type work but other water resources-type work, a lot of international stuff for the World Bank and some other projects. But when I got to California, the lightbulb went on and I was like ‘Wow, that work we were doing in North Carolina for water utilities—it’s not being done here.’ I saw that as really troubling and sad that other utilities weren’t getting those types of services. After I had already started my consulting firm, I said to Jeff and the EFC that I wanted to try to bring that work out to California because we were in the middle of a really bad drought; utilities were selling a lot less water and were really having major financial disputes.
There was a problem and I saw the best solution available to them. That’s how I figured out that being an entrepreneur is actually solving a problem that’s really hurting people.
What drove you to found Valor? How did it come to be?
Valor was the recognition of some of the work I had done with the EFC. In particular, the residential water consumption analysis for Urban Water Consortium. I really wanted to bring that analysis to California water utilities, but I also wanted to automate it and make it into software.
I started thinking about what part of that analysis we could make into something that would be available as software as a service—something that was available to help utilities on a subscription-type basis. I was thinking about that and decided to found Valor. I wanted to build a software company, and so I founded Valor very narrowly to take what we had done at the EFC, as far as that report, and turn it into software. That’s when I talked to Jeff and got all the licensing I needed and what we call in business our “go-to-market plan.” How to build it and sell it.
What would be the benefit for the average water utility to be working with software like Valor produces?
Our focus is on solving a problem called apparent water loss: a form of non-revenue water. This is unbilled water flowing through the meter that is not billed for. It could be theft, it could be a meter inaccuracy, it could be a meter misread. Let’s say a 1000 gallons flow through the meter, and only 800 are billed for some reason. Well, our machine-learning algorithms are able to identify and detect all these different forms of unbilled water. We’re consistently locating and helping utilities recover about 1.5% of their annual operating revenue through the issues around apparent water loss.
So, Valor was acquired by Xylem earlier this year. Congratulations again. Has Valor’s scope of work changed under the Xylem umbrella or is the trajectory of Valor going to change at all since being acquired?
The big change with Xylem is that we now have access to a global commercial marketplace now. So instead of going around in the United States, we’re now pitching to utilities in the Middle East and Africa and Asia. We think it’s very likely that our software and technology will be deployed globally much faster than it would have been if it was just Valor alone.
For a utility that doesn’t have the resources to work directly with Valor, what advice would you give them to start tackling some of these issues, like apparent water loss, on their own?
When we first go in, we do something at the beginning when we start talking to utilities about discovery. We simply ask them a lot of questions like “how often are you testing and replacing your meters?” “how old are your meters?” “what’s your basic maintenance program around your meters?” We’re able to help get an eye, an intelligence, on the state of their meters just from data, which is a lot easier than sending guys out there to actually look at them. Short of having software, if you have an active meter testing and replacement program, that’s certainly a good place to start.
What are the most important themes/opportunities you see in the water finance industry today and going forward?
Something that is big on my mind right now is that the price of water and wastewater services is exceeding the rate of inflation. It’s just getting high really fast and, even with that, the price tag on rebuilding America’s infrastructure is tremendously high. Even with the rates we have today, we still don’t have enough money to rebuild and invest in critical infrastructure.
What I want to see is less things like just pouring concrete and building new reservoirs and giant new pipes, but more of intelligence and optimization of current infrastructure, using things like sensors and meters and remote satellites. Using things that can give you intelligence and reduce that capital spend by actually targeting the replacement of assets in desperate need without doing a mass replacement because that’s when you might be replacing infrastructure that’s operating perfectly fine—an optimized infrastructure vision to bring down this giant price tag that’s now beyond the affordability threshold of American ratepayers.