Pioneering B2B provider of ultra-pure water gets clear run at expansion with £3.9m of senior debt growth capital

News: Investment News | 13 July 2022

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Connection Capital, the specialist private client alternative investments business, has completed a £3.85m senior debt growth capital investment, with equity in Spotless Water Ltd, a high growth, B2B provider of ultra-pure water via an established UK site network.

  • First mover advantage and innovative technology supports potential for explosive growth
  • Demand is growing for environmentally-friendly filtered water for a variety of industries

An innovative technology-enabled provider of ultra-pure water for specialist business use is set to ramp up its expansion plans with £3.9m of senior debt growth capital via Connection Capital, the specialist private client alternative investment business.

Spotless Water Ltd offers the UK’s first self-service purified water distribution network servicing business customers such as window-cleaners, valet companies and solar farms who require filtered water for a ‘streak-free’ shine, and others including dentists and aquariums who need it to be contaminant-free.

Established in 2017 as the ‘first mover’ in the water-as-a-service space, it now has 79 autonomous pure-water filling stations strategically located around the UK, where customers can fill up their own water tanks, at any time, after topping up their account with funds. It currently has around 23,000 registered business customers and there is a transaction on the Spotless network every 55 seconds.

Spotless Water intends to add hundreds more sites to its network nationwide in the next few years to establish its position as the market leader as demand increases, while it also sees opportunities overseas.

The flexible senior secured debt structure offered by Connection Capital will support the site roll-out strategy, by providing a five-year loan with one single repayment at the end of the term plus a small equity warrant. This will enable the business to use the capital to fund growth without being eroded by regular repayments.

Ultra-purified water is an environmentally-friendly cleaning agent as no chemicals are required in the cleaning process. It also enables businesses like window cleaners to meet health and safety requirements by allowing long poles to be used for a single wipe clean instead of workers having to climb ladders for a second wipe down.

Spotless Water developed its own proprietary water treatment system and advanced customer-facing software interface to provide a low-cost, convenient, reliable alternative to investment in in-house water purification systems that are expensive to acquire and challenging to maintain.

Doug Wilson, Investment Director at Connection Capital, comments, “Spotless Water is a true pioneer, using its team’s background in the development of water filtration technologies and digitally-enabled autonomous payment systems to come up with a solution to a business need that no-one else is servicing.”

“Ambitious, innovative businesses like this need finance options that are similarly innovative. Our funding package is structured to give the company the room its needs to grow over the next five years.”

“Demand for ultra-pure water-as-a-service is on the rise as businesses look to improve their green credentials, fulfil their health and safety responsibilities or find more cost-effective and convenient ways to access purified water – or all of the above.”

“Spotless Water has been able to demonstrate an impressive cash generation capability even at an early stage of its operations and it has also fast increased its revenues. With its first-mover advantage, solid intellectual property base and highly scalable platform – plus a healthy injection of extra capital - it’s got what it takes to cement a solid market leadership position.”

Tim Morris, CEO of Spotless, said: “Doug and the team at Connection Capital have been a pleasure to work with since we first pitched the opportunity here at Spotless Water. Their quick understanding of our business model, the market and the size of opportunity moved us to heads of terms at speed. The structure of the package allows us to focus on aggressive CAPEX growth, scaling up what we have already built and taking the solution overseas which is very exciting.”

About Connection Capital
Connection Capital LLP is a specialist syndicator of investment funds from private professional investors into direct private equity, private debt and commercial property deals, as well as alternative asset funds. It currently has some £400 million of funds under management across a diverse portfolio. Connection Capital provides a specialist managed service to help professional clients build up their own alternative asset portfolios. Private investors self-select which opportunities they want to take a stake in. Opportunities are identified and negotiated by Connection Capital, which also carries out all due diligence and manages the investment from completion through to exit, on its clients’ behalf. Connection Capital is authorised and regulated by the Financial Conduct Authority.

Press enquiries:
Claire Madden
Managing Partner
Connection Capital
020 3696 4010 or 07764 241476

Russell O’Connor
Headlines for Business 07760 282586