Jaime Barba, CEO of Idrica, speaks to Aquatech Online about how he sees the digital transformation progress in water utilities in Europe and further afield.
Spinning out Idrica
You could say Jaime Barba Sevillano has a firm grasp of the nuances, challenges and opportunities of digital transformation in water.
The former chief technology officer of Global Omnium, the water utility serving the Spanish city of Valencia (and over 400 cities), he became the CEO of the digital solutions company, GoAigua.
With experience inside and outside of the water utility space, he experienced success in helping utilities around the world with their digital transformation. However, the company reached a proverbial fork in the road.
“We understood that our technology was ready for the market, and we commercialised it under the trademark of GoAigua,” he told Aquatech Online. “Yet later we learned that in several countries, and several companies, they weren't ready for a complete digital transformation.
“They knew they needed a digital transformation, but for this to happen, a lot of internal processes had to be changed. Beyond the digital tools, they needed a company to help them change their mindset, to reorganise the organisation.”
Cue the birth of Spanish smart water company, Idrica, in early 2020. After gathering more than a decade of experience, the company was born with a founding team of 180 experts.
“We decided to found Idrica to provide services around the problems in the way of digital transformation while keeping GoAigua as the product.”
“We want to buy efficiency”
This strategy enabled GoAigua to be positioned as the software solution but Idrica more broadly to provide services and technological solutions for managing the entire water cycle, including operation & maintenance, leak detection, energy efficiency services and workforce management.
“The mentality for many companies is that they want to buy efficiency.”
“The mentality for many companies around the world is that they want to buy efficiency,” he adds. “They don’t want to buy software; they want to buy efficiency.”
Across the Atlantic, it was decided to keep GoAigua as the leading digital solutions provider in the competitive North American market, without Idrica operating there.
"In the US, there are already many companies providing engineering and some related services. So we decided that our value proposition in that market was only going to be based on our product, GoAigua.”
Idrica operates independently while still linked to the Valencian utility Global Omnium, which could be called a “sister” company behind the often quoted flagship digital twin success in Valencia.
To date, work by Idrica for Global Omnium makes up 25 per cent of its annual budget, but Barba expects this to fall to 18 per cent in 2022. Furthermore, to maintain separation, any new technology development is done by Idrica.
“There can be a risk for many big companies where they get into big trouble competing with the spin-off. We cannot allow ourselves to do that, so we operate in different markets. From the very beginning, the strategy was made clear for both parties to maintain the separation.”
It’s the time of the technologists
Context and history to one side, Barba believes the collective company structures will help the industry overcome one of the biggest looming challenges: a retiring, ageing workforce.
It’s estimated that some water utilities are expecting to lose up to 50 per cent of their operations staff in the coming 15 years.
“All of the know-how of senior staff within the organisations could be lost because companies are struggling to recruit young talent,” he says.
“We need technologists – people that take the know-how and combine it with modern technologies to deliver more efficient water services.”
“Many organisations expect technology to help bridge the gap between the know-how of the senior and younger teams. Technology and supporting systems have the potential to make this vital link, and at Idrica, we are managing projects to help do that."
Barba strongly believes that now is the “time of the technologists”.
“We need technologists – people that take the know-how and combine it with modern technologies to deliver more efficient water services. We have learned within the utility Global Omnium that senior team members were generous and openly gave us their know-how. As a result, we have the know-how as Idrica from 20 years ago baked into our modern DNA and offering.”
Building an investment fund
As if running the global company Idrica isn't enough; the CEO is also helping oversee its €30 million fund called GoHub Ventures, which is part of GoHub – an open innovation hub by Global Omnium.
The fund recently invested into US-start up, divirod, which helps to monitor and forecast water-related risks. Barba says the fund has a “double strategy”.
"On one hand, we invest in water companies that provide technologies that complement the portfolio of GoAigua. While GoAigua is a system with a holistic view of the management of processes in a water company, there is also a need for complementary tools around the core business, for example, satellite technologies.”
He adds: “On the other hand, the GoHub fund is a business unit by themselves and looking to make exits within five to six years after the initial investments.”
“Because we have much know-how…we can understand whether the solution and investment will work in water."
Around 700 companies are analysed, with between five to seven investments made per year, averaging between €500,000 to €1 million – around the pre-seed or seed phase. After making multiple investments, the team exits around the Series A timeframe to get a return three times its investment.
“Our path is from seed to pre-seed to Series A. Why? Because we have much know-how to understand if the technology is good or bad, and we can quickly analyse whether the solution and investment will work in water. Compared to other markets, banks and big investors analyse very quickly because they have significant amounts of money to move.
“As a boutique fund, we can’t do that. Because we analyse so heavily and combine it with our experience, we see opportunities that other investors don’t understand.”
Validating the technology
The GoHub Ventures fund is increasingly becoming more international. While it started with 60 per cent of Spanish companies, this now stands at around the 40 per cent mark.
"We're now gaining interest from companies in Northern Europe to the US and even India. We have listening points in Helsinki to Boston and Barcelona, so we’re not only investing into Spanish companies.”
Speaking with his utility experienced hat on, the CEO is adamant about using pilots to prove startup solutions as being viable.
“We always, always validate technology with a pilot project - we don't buy anything where we haven't validated the technology,” he adds. “We need to get the full picture understanding, to see if the claimed numbers work on efficiency, for example, and the potential return on the investment.”
It’s clear that with its origin in Valencia, the family of companies are collectively spanning the water ecosystem. Whether it’s the digital solutions product, GoAigua, or the smart water company Idrica, through to the investment fund GoHub Ventures – all have a rightful place that interlink yet don’t conflict and complement each other.
Barba is leading companies that have achieved success in water's digital transformation journey. It’s that experience that could prove essential in the longer-term digital race.
And with an eye on continued international expansion and growth, he’s not stopping there.
- Jaime Barba: It's time to learn from our mistakes
- Valencia: sun, sea and Digital Twins
- Divirod investment connects Spanish and US markets