Water quality monitoring start-up Eco Detection banks $8m ahead of IPO

There’s nothing muddying the waters with this deal.

Water quality monitoring technology company Eco Detection has closed an $8 million convertible note ahead of an ASX listing in 2023, bringing on global engineering services group GHD as an investor. The raise was managed by Lodge Corporate.

GHD took out $2 million of the raise, and has been granted an exclusive option to invest a further $2 million.

The company was spun out of Grey Innovation, which specialises in commercialising university research.

The research underpinning Eco Detection’s technology was conducted at the University of Tasmania and is the same core technology used by bomb and explosives trace detection company GreyScan.

The detection technology utilises capillary electrophoresis and enables the start-up’s in-field devices to analyse the quality of water in less than a minute, supposedly for a tenth of the price of standard laboratory testing.

The analysis is within 5 per cent as accurate of lab testing, but Eco Detection measures the water quality of rivers far more often than traditional methods that require a person to take a water sample, conducting analysis every four hours.

Eco Detection CEO Jefferson Harcourt, who also formed Grey Innovation in 1998, said the traditional method of monitoring river water quality was now defunct.

“You get a much richer data set and much earlier warning if something goes wrong. It’s automating a manual process, and it’s long overdue,” he said.

“In Western Australia there is the added problem of distance. I’ve heard of instances where aircraft have needed to be deployed to get one water sample, and it costs $20,000 to $30,000.”

The company is still early in its commercialisation, generating only a small amount of revenue. It has a recurring revenue model, where it provides a data-as-a-service subscription, as well as offering leasing options for its monitoring devices.

As well as catchment authorities and farm operators, the business will also target water utilities, councils, large industrial water users and mining operators as potential customers.

Harcourt said the company would need to raise another $20 million, or so, before it hits earnings positivity, and it would also look to secure debt financing.

Australian Financial Review