Burnt Island Ventures, a leading VC firm exclusively dedicated to early-stage water innovation, announced the close of its second fund with $50 million in committed capital. The new fund will support the development of breakthrough technologies addressing the massive global water market.
Founded in 2020 by water industry veteran Tom Ferguson, Burnt Island Ventures was created to close the funding gap in water technology innovation despite the sector’s vast scale and growing urgency. The firm’s first fund, a $30 million vehicle, is fully deployed across 18 companies, delivering two exits and strong top-decile portfolio performance. Among its investments are Daupler, Flocean, Subeca, Floodbase, and SewerAI—companies tackling major challenges across smart metering, desalination, and infrastructure modernization.
Fund II builds on that momentum, positioning Burnt Island Ventures to deepen its mission of identifying, funding, and scaling founders developing solutions to pressing water challenges. The new fund is already being deployed and will target seed-stage companies across the full water value chain, including advanced treatment and filtration, AI and water data analytics, infrastructure resilience, climate adaptation, and water reuse technologies.
Burnt Island Ventures distinguishes itself as the most active water-focused venture firm globally, combining deep sector knowledge with traditional venture discipline. The leadership team includes Tom Ferguson, Managing Partner; Christine E. Boyle, the founder of YC-backed Valor Water Analytics (acquired by Xylem); and Steve Kloos, a former senior leader at GE Water and experienced investor.
Xylem, a global water technology leader, serves as anchor investor in Burnt Island Ventures’ second fund, continuing its partnership from Fund I. Xylem’s involvement reflects the company’s commitment to supporting early-stage innovations that can strengthen water resilience and sustainability.
Burnt Island Ventures also received investment from WovenEarth Ventures, a climate-focused fund-of-funds. Investors view the firm as a category leader with strong performance potential and a distinctive thematic focus in a sector poised for rapid growth, driven by aging infrastructure, escalating climate pressures, and increased water demand from industries such as AI, semiconductor manufacturing, and cloud computing.
KEY QUOTES:
“The global water sector is a trillion-dollar industry hiding in plain sight. Fund II allows us to double down on our mission of finding, funding, and scaling the most ambitious founders who are solving water’s most pressing challenges, as well as giving them the sector-specific expertise and network they can’t get anywhere else.”
Tom Ferguson, Founder and Managing Partner, Burnt Island Ventures
“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. When all stakeholders in the water ecosystem work together—investors, corporates, and entrepreneurs— we can accelerate innovation, bring early-stage technologies to scale and transform the water sector to build a more water-secure world.”
Sivan Zamir, VP of Enterprise Innovation & Venture, Xylem
“WovenEarth invested in Burnt Island Ventures Funds I and II because we believe they are an excellent fund manager capable of generating top quartile returns with a commitment to continually strengthening their fiduciary capacity. Their team is one we never hesitate to endorse, and the fact that they are thematic experts on a highly underestimated theme is a bonus!”
Jane Woodward, Managing Partner, WovenEarth Ventures
