Burnt Island Ventures, headquartered in New York and founded in 2020 by Tom Ferguson, has successfully closed its $50 million second fund aimed at early-stage water technology startups. The founding team also includes Christine E. Boyle, PhD, founder and former CEO of Valor Water Analytics, which was acquired by Xylem, and Steve Kloos, PhD, a former senior leader at GE Water with extensive venture capital and startup experience.
The fund focuses on addressing major global water challenges stemming from ageing infrastructure, climate change pressures, and rising water demands driven by AI data centres, cloud computing, and semiconductor manufacturing.
Burnt Island Ventures operates exclusively in the water sector, a market valued at $1.6 trillion but historically underfunded and overlooked relative to other climate technologies. As Ferguson puts it, “The global water sector is a trillion-dollar industry hiding in plain sight.”
Fund II targets seed-stage companies developing advanced water treatment and filtration, AI-based monitoring solutions, infrastructure resilience and efficiency, water reuse and climate adaptation technologies. Alongside this, Burnt Island is raising a $75 million Growth Fund, which has already invested in three companies, including Daupler and Irrigreen.
The firm’s debut fund fully deployed $30 million across 18 companies, including Flocean, Subeca, Floodbase, and SewerAI, spanning innovations from smart metering to deepwater desalination. Burnt Island’s partnership with Xylem, the global water technology leader and anchor investor in both funds, strengthens its ability to scale portfolio companies.
Sivan Zamir, VP of Innovation & Ventures at Xylem, said, “Innovation is essential to solving the world’s most critical water challenges. Burnt Island Ventures brings the focus and funding to back breakthrough water start-ups, while our program Xylem Innovation Labs helps those start-ups scale by connecting them with the reach, resources, and knowledge of the world’s largest pure-play water technology company.”
Distinct from generalist VCs, Burnt Island combines venture discipline with deep, specialised expertise, making it the go-to investor for water startups.
Looking forward, Burnt Island aims to continue filling the funding gap in water innovation globally, accelerating technologies that address critical water infrastructure and supply challenges.
