The mining company's venture capital firm signed a Simple Agreement for Future Equity with the startup, which was founded in 2018. It invested US$200,000. "What we do is clean contaminated water. We process it and make it usable," explains its founder, Pablo Cassorla.
SQM Lithium Ventures (SQM LV), the company's lithium business venture capital fund, announced its first Simple Agreement for Future Equity (SAFE) with Remote Waters, a Chilean startup focused on water treatment for rural communities. This agreement allows a startup to receive investment and stipulates that the number of shares the investor receives will be determined at the time of a subsequent investment round.
"It means being able to have an equity stake in the future, should this startup grow into something larger, a publicly traded company. It's more than just a loan. It's one of the valid options within SQM LV. We've studied various approaches to determine the best way to provide financing to startups. Lithium Ventures pursues this goal. On the one hand, it identifies fields that align with the company's interests in this case, and at the same time, it takes a more financial and investment-oriented approach to see what the startup needs to grow," Corrado Tore, Hydrogeology Manager at SQM, told Pulso.
"Remote Waters struck us as an interesting proposal because it addresses a fundamental segment globally. Access to water, and clean water in particular, is a problem that concerns a large part of the world's communities. Remote Waters refined this idea of delivering a technological solution to provide drinking water or irrigation to relatively isolated communities. We found it a very interesting idea," he added.
SQM LV believes this alliance is a step in the right direction, given the potential of the startup founded in 2018.
"We believe this initiative, the startup Remote Waters, has great potential. Our goal is for it to find a way to grow and become a more solid company. That's where the idea of partnering with them came in. We are the right partner to provide financial support and a large-company vision, something they don't yet have. We believe their idea is sound and very well-directed. It's the perfect partnership between a large company with resources and vision, and a small company with a very valid vision."
SQM LV has already invested an initial capital of US$200,000, which could be increased. The company's stake in the startup is not yet defined.
"That will be determined when the company faces a broader round of investment. That's when SQM will define its stake. It depends on the potential the company is able to demonstrate to investors, not just us."
Remote Waters was chosen from a wide selection of startups interested in the water sector.
The startup is dedicated to addressing the lack of access to clean drinking water that affects many communities in Chile and around the world. They have projects both within and outside of Chile. Their founder, Pablo Cassorla, explained their work to Pulso and praised the partnership with SQM LV.
"What we do is clean contaminated water. We process it and make it usable. We use adapted processes like reverse osmosis. We focus on rural communities. All of this is within the context of water scarcity and drought. We can treat water from the sea, rivers, and wells, whether for drinking or for agriculture," said Cassorla.
He also stated that "we participated in the 'More Lithium and Less Footprint' competition and won it at the time. The project involved purifying water from the Loa River to enable agriculture in the desert."
"That was like the first step with SQM LV. Then they opened this first program and we managed to get in," explained the startup's founder.
Cassorla sees this alliance with SQM Lithium Ventures as "a vote of confidence."