The artificial intelligence company Evolution Water has begun a presentation ahead of a $ 5 million round of funding

The artificial intelligence company Evolution Water has begun a presentation ahead of a $ 5 million round of funding, which will be led by a state-owned international investment company. The raising will be made at a company value of $ 85 million before the investment. Upon completion of the current raising and subject to progress in the implementation of its product in Mekorot, Evolution is expected to issue its shares on the Tel Aviv Stock Exchange in 2022 - at a substantially high value.
Water Evolution, founded in June 2020 by parent company Evolution Group, is developing artificial intelligence-based algorithms to optimize the operating units of water companies. The algorithms provide predictions regarding system malfunctions and water supply disruptions; And make recommendations regarding the optimal timing of maintenance work and prevention of fracture maintenance (i.e. repairing a fault with its occurrence, whose operating cost is three times higher than the planned shutdown for maintenance).
The implementation of Evolution's systems in the water, sewage and effluent infrastructure is intended to maximize the existing infrastructure, reduce excess investment in infrastructure and maintenance, and reduce the carbon footprint of water production and transportation systems. In the US, for example, this infrastructure is responsible for about 2% of energy consumption and 45 million tons of greenhouse gas emissions per year.
Evolution is held by Mekorot (about 15%), which invested in it at a company value of NIS 10 million in the first quarter of 2021. The company's low value for Mekorot's investment is explained by the fact that the pilot success of Evolution systems in Mekorot's facilities generated most value for the company.
Mekorot invested in the company after the success of installing a pilot of the Evolution system in 16 pumping units, seven drilling sites and seven cities. Evolution was required to meet an 8% savings target in the power consumption of sources at these sites, but the pilot resulted in a 10% -12% saving in power consumption. Under the agreement with Mekorot, the company also receives 12% of the annual savings in electricity expenses at the sites where its systems were installed.
Mekorot, which is managed by Eli Cohen, is one of the two largest electricity consumers in the country - with an annual consumption cost of NIS 735 million in 2020. Energy expenses were 18% of the company's sales costs in the past year, and the largest expense item other than the purchase of water from desalination facilities.
Evolution's systems are currently being installed in the Ramla area, and after the completion of this installation, they will be installed in the Jerusalem and East Ayalon areas. This geographic area is responsible for 40% of Mekorot's water consumption, and according to estimates the installation of the system is expected to result in a 10% -15% decrease in the company's energy consumption in the area.
Water Evolution is managed by Amir Yaar. The parent company, Evolution Systems, holds about 86% of it (after Mekorot's investment), and the investment company CI Synergy Asia holds an additional 9%. Evolution Systems was established in 2011 by graduates of Unit 8200 Roi Morad and Idan Cohen. The company raised $ 22.5 million in May 2015 from American Berkshire Hathaway Energy Company - the energy arm of Warren Buffett's Berkshire Hathaway Group (-0.94% 287.01); GE Ventures Projector; And from the Japanese investment company Mitsui.
In the beginning, the company focused on developing software for continuous management and monitoring of cellular networks, and producing forecasts for loads at any given moment according to the analysis of the usage pattern of subscribers. These forecasts formed the basis for the dynamic management of cellular network resources, through the switching on and off of cellular antennas, which generated millions of dollars a year in the energy costs of cellular companies such as Spanish Telephony. At a later stage, Evolution established similar subsidiaries in the field of power grids, refineries and data centers.