Boston-area water tech company Gradiant has raised $225 million in a deal that values the firm at $1 billion and marks one of the largest local venture capital funding rounds of the year.
In a tough climate for startup funding, Gradiant represents the first announced new “unicorn” in Greater Boston this year. In the first quarter, the fewest Massachusetts startups since 2016 got VC backing and the dollar value of deals plunged 55 percent, according to data from market tracker PitchBook and the National Venture Capital Association. Gradiant’s round was the second largest in the state this year, trailing only Orbital Therapeutics’s $270 million fundraising in April, according to CB Insights.
Gradiant’s technology, based on the natural evaporation and rainfall cycle, cleans wastewater at factories and manufacturing facilities for corporate clients including Coca-Cola, Micron Technology, and Pfizer.
The company employs more than 900 people and has more than doubled its annual revenue for each of the past four years. The new funding will help Gradiant expand into the Middle East and Europe and also back further research and development, the company said.
Cofounders Anurag Bajpayee, now chief executive, and Prakash Govindan, chief operating officer, met at MIT more than a decade ago, where they hatched the idea to mimic the natural water cycle in tall towers that could be located at industrial sites. Gradiant’s annual sales exceeded $100 million and the company was profitable, the cofounders told the Globe last year.
The latest fund-raising was led by BoltRock Holdings and Centaurus Capital. Gradiant has raised a total of $400 million.
“As global manufacturing and supply chains continue to advance, they demand more and more water resources which are increasingly rare and finite,” John Arnold, founder of Centaurus Capital, said in a statement. Gradiant’s technology has “the ability to support these demands in an economic and energy efficient manner.”
The company is also expected to benefit from the CHIPS Act law passed last year to subsidize building semiconductor fabrication plants in the United States. Such plants consume vast quantities of water, and beneficiaries of the new law that are planning to build new US plants, such as Taiwan Semiconductor, are already Gradiant customers.