Water recycling chief has thirst to go global with vision for 'oil of the future'
Interview: Paul O’Grady, Executive chairman, H2Ozone
The banking veteran is out to use his experience of building businesses to help firms boost their environmental credentials and cut their water bills, writes Gavin McLoughlin
How much easier would the water charges row have been easier to resolve if people could just recycle the water they use in their house? Paul O'Grady is working on technology to do just that. He's the CEO of H2Ozone - a water filtration company that's looking to scale quickly.
It's not the first business he has looked to build.
Originally from Limerick, Mr O'Grady (57) spent more than 20 years working in AIB, before moving to ICS Building Society and then to ABN Amro where he became director of operations in Ireland.
He had invested in a voice verification business known as Buytel - and had an idea that financial transactions could be confirmed over the phone using technology that recognised somebody's voice.
"We basically did up a business plan and we raised £5m based on the business plan, it was that sort of time," Mr O'Grady says.
"We left and went to a loft in the middle of town and started off with two PCs."
Two years later it was September 2001 and the company was on the verge of signing its first contract - but then 9/11 happened and the other party pulled out of the deal.
"We had to sit down and reinvent the company and we basically went into mobile infrastructure and mobile games. We won the contract eventually with O2 in Ireland - when you would request a ringtone or a game or anything like that, we were the infrastructure behind it. That was great. It was different - at least we weren't losing money."
After that, he became involved in a deal to take the Irish Quality Association - the guardians of the 'Q Mark' certification designed to recognise business excellence - private. After a chance encounter on a holiday in the Middle East, his involvement with the Q Mark would present him with his next big break.
"I went on a golfing holiday to the Middle East in 2005, met a very interesting character, told him what we did and he asked me to come out and do an assessment of a mine in a place called Fujairah because they were losing money hand over fist.
"I went out for six weeks - presented them the business plan, saved them about €2m a year. That was in May ... they called me back in October which I thought was just another presentation and they offered me the job as CEO of the company."
It was a granite mine - an attractive business opportunity in an area where the rock was mostly limestone. That meant the mine was well placed to supply the more hard-wearing granite to a rapidly expanding emirate of Dubai.
To drive the business forward Mr O'Grady took on a transport company and later did a deal with a Hong Kong shipping company, who went on to buy the business.
Deciding that he didn't want to retire - he'd get bored - Mr O'Grady started to look for new investments.
"I wanted to get involved in building a business - we had built the business in the Middle East from essentially scratch to a £500m business.
"We wanted to use that experience to try and do something over here."
He went to about 50 angel investor nights without finding a pitch he wanted to invest in - until he came across a rainwater harvesting business that was then called Rain Safe. Its idea was to clean rainwater to a drinkable standard.
This was right up Mr O'Grady's alley.
"I've always been into water. I do think it's the oil of the future.
"Water is getting more and more scarce - you'll hear a lot of conversations about how to conserve it, how to reuse it. And that's where we think we come in."
At first he was a non-executive director but in 2015, after a choppy enough ride, the board decided it needed a change of direction. The company needed to raise cash fast if it was going to survive - and managed to get €2m in six weeks to keep the lights on.
Its list of backers includes Danu Partners - the Irish private equity firm, two of whose principals set up Setanta Sports.
Danu also has interests in the Mercantile pub and restaurant group and the Smith & Wollensky steakhouse chain.
Now the company - rebranded from Rain Safe to H2Ozone - is on a path to profitability with revenue likely to be three times higher than last year in 2018.
The firm, which is based in Co Wicklow's Newtownmountkennedy, is still likely to lose €1m this year, but is targeting profitability in 2019. A key strategic decision made was to broaden its uses beyond rainwater into cleaning other types of water. From there they made the leap into industrial and commercial premises, including the Merrion Hotel which is using H2Ozone's technology to recycle water.
The key selling point is that the technology boosts the environmental credentials of a premises as well as cutting down on the amount of water being pumped in and thereby saving money on water charges (in Ireland businesses pay for their water - individuals don't).
People tend to be wary though about taking on technology that interferes with their water, so to achieve scale fast the company thinks the best option is to find a global strategic partner.
It already works with Xylem - an American water technology business that helps give it credibility as well as helping to boost sales.
Future growth might involve a product for homes - the existing product needs to be miniaturised in order for that to happen - as well as a desalination product which would make sea water drinkable.
That requires substantial investment however, Mr O'Grady says. It's also providing an agriculture-focused product known as Agri-Safe. "The board have concluded we need a global partner to actually take advantage of this. The technology is unique and has patents and things like that but everything can be copied. So if you're going to take advantage of the opportunity you're going to have to do it with scale.
"We raised €3m last year and we'll probably raise another €1m-€2m this year. But if we're going to achieve scale the only way we're going to do it is with a global partner. So we are actively now trying to get into bed with a global partner.
"We believe the technology has proven itself at this stage so now it's a case of utilising the experience from production to sales, to global sales and servicing - we just can't do that.
"The board's first intention is not to sell it - they'd like to keep involved in it. Does it mean that we might have to give away a majority or ultimately have to sell it if somebody puts a number on the table?
"Nothing is ruled out, but our hope is that we're going to take a strategic investor in who's going to allow us to be part of the growth phase."