Ex-SpaceX engineer raises $24M to bring off-grid desalination to consumers with a $749 device

Speaker 1: And Yeah. We'll make it next year.

Speaker 2: To. Yeah. That'd be fantastic.

Speaker 1: Yeah. Thank you.

Speaker 2: Have a great rest of your day. Have a great rest of the conference and congratulations.

Speaker 9: You guys too.

Speaker 12: Thanks for having

Speaker 2: talk to you soon. Up next, we have Jonathan Criss from Vital Life working on desalination with a fantastic new fundraising round. Jonathan, welcome to the show. How are you?

Speaker 13: I'm doing fantastic. How are guys doing?

Speaker 2: We're great. I'm I'm so excited

Speaker 1: Insanely

Speaker 2: to

Speaker 1: talk to fired up.

Speaker 2: Were talking with Let's go. Yeah. We were talking with Peter Diamandis about desalination, and it's always been such a fascinating just not even a sci fi technology, but just a just an underutilized technology that has incredible promise, but hasn't felt like it's hit the takeoff that it needed to, and so excited to hear your plan. But why don't you kick us off with an introduction on yourself and the company and how you're thinking about things?

Speaker 13: Yeah. So I'm John, CEO and founder. I was at SpaceX for thirteen years before this. Started off in Dragon. Elon was like, stop using Dragons or building Dragons, you idiots. And I like, oh, man. I'll figure that out, boss. Started off with a a small team to go figure out Dragon Reuse.

Speaker 9: Yeah.

Speaker 13: The whole program became Reuse Vehicles so it just took over as product managerRE. And then kind of got bored of spaceships, wanted to take on a new challenge, jumped over to Starlink team to figure out rate manufacturing where we got really plugged in on how you design for really high volume manufacturing. And then my co founder and I started really talking about how do we make a meaningful impact in the world, what's the next big challenge, and then got our head wrapped around answering that question that every eight year old kid has, how could there possibly be water scarcity when there's oceans everywhere?

Speaker 2: Yeah.

Speaker 13: And then just like you said at the at the top of the segment, it's like, man, this technology feels like it's really cool, but it's just right right on the cusp of becoming awesome. And we think if we apply the lessons that we learned on Starlink with high rate manufacturing, driving down the cost, and really delivering this technology to everyone, we we can really make that meaningful impact.

Speaker 2: So walk us through the first product. I I was always thinking that the next big desalination company would be a huge desalination plant, but you're going much smaller. So walk me through the thesis there.

Speaker 13: Yeah. I love that because that's pretty much where everyone in the industry has focused, right? We got to clean a ton of water. These systems are super freaking expensive for upfront capital cost so the only way to make your unit economics in that use case work is by going really large and cleaning its ton of water. We just looked at it from the other end as like, man, if the upfront cost is negligible and you can keep your energy and maintenance costs low, you can probably do about the same and just scale it in terms of number of units, not large centralized system. And then it's just kind of blown up the thought process entirely inside of that because now you're looking at infrastructure resilience and and people being less reliant on centralized systems, and then you can open up to people that are more on the move, people that are are island struck, and really, man, the customer base kind of exploded from there. Like, oh, man. Like, if you could just deliver a low cost product, people wanna use it.

Speaker 2: Yeah. So so walk me through, like, a textbook customer. Where are they?

Speaker 1: Can you explain like can you just explain the product like I'm

Speaker 2: Yeah. Like, how big are we talking? Like, is this Yeah. Diesel generator size? Like

Speaker 13: Yeah. So we launched Access this week, which is our first consumer product. We're we're a little bit more in the middle market going into customer bases that already exist. So maritime industry has these these types of products. It's or reverse osmosis is at the core of our technology. Mhmm. What we do is we're able to do that manufacturing process at a much, much lower cost and then a much higher volume. So the product that you're seeing on your screen access, the facility that we got here in Torrance, we're able to produce more of these devices in a single month than currently exist. So we're kind of really taking that whole

Speaker 1: process Okay. But explain but but sorry. Sorry. Is you put a hose into salt water and then it goes into the machine and out comes potable drinking water.

Speaker 13: Exactly. Okay. We always say we designed for Terry.

Speaker 1: Just wanted to to to to be clear.

Speaker 13: So how Yeah. And hydrate.

Speaker 2: Yeah. How many people off grid actually have access to salt water or or dirty water?

Speaker 1: Work for springs and lakes and

Speaker 2: Yeah. Is that the idea?

Speaker 13: Yeah. Yeah. So you can clean what we say is any naturally occurring water source. Salt water being the hardest one to clean and why desal has been kind of out of reach for most people until now. Yeah. But, yeah, well water is is super common in The United States. Sure.

Speaker 12: I think

Speaker 13: it's like 11% of homes live on well water in The US. And then brackish water is super common, I mean, in marshlands. I mean, lots of lots of south of pretty much all Florida.

Speaker 2: Yeah. How do you deal one one of the common things we hear about desalination is that, yeah, you you get clean water out, but you also get all of the dirt and all of the salt and and whatever else you don't want in your clean water. What do you do with that in your case? What happens normally?

Speaker 13: Yeah. So the stigma is in your, what you call brine or your concentrate. So when you run a very large plant, you want your recovery as high as possible so your concentrate is much, much higher, like two times the salinity in your salt. We actually run our system efficiently at a much lower recovery rate in the 15 to 20%. So as long as you're putting your brine or your concentrate back into a source water greater than five gallons or so, it almost immediately dissipates into that volume. We get the wins inside of there in terms of hey. You can use this product. It's not making that environmental impact because it's smaller form factor, lower flow rate, and lower, brine concentrate as well.

Speaker 2: Mhmm.

Speaker 1: What about battery? Is this is it battery powered? Do you plug it in? What's battery life like? Could you eventually create some type of solar array so that it's entirely self sustaining?

Speaker 13: 100%. Yeah. So it runs on ACDC. It's got an integrated battery. If you're cleaning ocean water, you're running for about an hour. If you're using fresh water, anywhere from about probably closer to three hours. It all depends on the source water that you're cleaning. Ocean water has a ton of salts inside of it so it's really difficult to remove those at higher pressure. Fresh water is much, much easier. You're essentially just killing bacteria and viruses. You can run it on ACDC. We do integrate with solar as well you know, if you have a decent sized solar panel, you can run this thing as long as you have

Speaker 1: sunlight. Amazing.

Speaker 2: Talk about what you've learned about the traditional large scale desalination operations. There's actually an article in the Wall Street Journal today about San Diego producing surprisingly a ton of water from desalination. San Diego now has so much water that it's selling it. Once a drought poster child, the California city now generates enough water to rescue parched states like Arizona and brew beer from recycled sewage. Are you optimistic?

Speaker 1: About that last part of Recycled sewage. Sewage beer.

Speaker 2: So they take sewage water and they clean it so effectively that they can brew beer in San Diego. They might have

Speaker 4: to disclose

Speaker 2: that on the label,

Speaker 8: but Yeah.

Speaker 2: Yeah. Think that we can get past the stigma at some point.

Speaker 13: The wastewater wants one. Bill Gates solved this problem a long time ago and it's like no one wants to drink a poop or or pee water. Right? Yeah. Luckily, the ocean is is is arguably the most abundant resource on earth. Yeah. And that's kind of the resource that we want to tap to bring this technology forward. But large plants are they serve a purpose. We want to be a partner with them, not a disruptor in the near term, right? Similar to Starlink, you had your, what was it, 10,000,000,000 infrastructure bill to give internet to rural areas that service zero people, yet Starlink could do that at a fraction of the cost. So we look for those people that are kinda high and dry right now and need access, and that's kind of our initial customer base that we're going through.

Speaker 2: Yeah. How much does the product cost? Where is the business? Give us an update on the round.

Speaker 13: Yeah. Yeah. So $7.49 is our allowance price right now, but you can preorder for $88 totally refundable.

Speaker 9: Wow.

Speaker 13: We're getting into production here over the next actually our first PCB show up next week which I'm very excited about. The round was towards the end of last year. We have a great table, really awesome partners with GC and Interlagos. Yeah. And and that capital has gone a really long way to help us accelerate. So, like, the business has only been around for a little over a year Wow. And we're we're about to step into production here over the next few weeks.

Speaker 2: Yeah. Looks like you're in a production facility. How big is the warehouse? How many people do have on staff?

Speaker 13: Yeah. We're 37,000 square foot facility here in Torrance. We're actually right next to the k two guys.

Speaker 2: Oh, cool.

Speaker 13: Nice. I keep seeing all my friends on you guys' show. Man, it's kind a rite of passage

Speaker 2: at We this

Speaker 13: have 37 full time employees right now plus a ton of contractors that help out and we'll probably be closer to, man, when we're at rate, with a bunch of, associate and production staff just waiting to hire once we get into production this summer.

Speaker 2: Yeah. Do you think that the business will remain almost entirely direct to consumer, or do you think there will be applications for business to business, construction crews, military, government, all sorts of different things?

Speaker 13: Yeah. Use this a lot. Gwen gave us a talk in 2013. She was like, Yo, guys, we got to get NRO certification because NASA is pretty much supporting this entire business. So when we started the business, we wanted to have multiple revenue streams that in the event of a macro event we can be reliant on. So the US military has a water logistics problem. Half of all casualties coming out of Iraq and Afghanistan were related to convoys moving water and fuel. They're excited and to be able to open up where they can get water from. Then NGOs, humanitarian groups are almost solely reliant on bottled water which is another logistical nightmare. Are both groups that we've engaged with and we have a lot of exciting conversations with, but then also some partnerships that we're going be announcing pretty soon. Then direct to consumer is the hardest problem. Elon used to tell us all the time when we were starting Starlink, go after direct to consumer because they're gonna give you the biggest feedback. You're gonna get roasted on Reddit and you're gonna know quick whether or not you made a mistake. So after I'm being personally roasted on Reddit a number of times, you learn really fast. That's who we wanna go after first. We wanna solve the hardest problem first and then open up to to those other larger customers afterwards.

Speaker 2: Yeah. That makes sense.

Speaker 1: Awesome. Very, very, very, very cool product. And I'm I'm I'm gonna pre order one just to play around with it, bring it to the beach just to Come. Just to have some fun.

Speaker 13: Come by the factory. I always say bring a bucket of your favorite ocean water. We'll clean it and drink it. It's a lot

Speaker 1: of fun.

Speaker 4: That's amazing. Long does

Speaker 2: it take to clean a bucket of ocean water?

Speaker 13: A five well, we do six gallons of ocean water an hour. Okay. So about one hour. Well, little under an hour because most do five gallons.

Speaker 2: Five gallons.

Speaker 1: Cool. You're gonna need two. John's, like, horse size, so he he could easily get you, like, 10 gallons an hour.

Speaker 2: Okay. The chat wants to know what happens if you put a Diet Coke through it?

Speaker 13: It'll separate all we do this all the time. You do? We did a reverse Jesus the other day. We removed all the alcohol and water from wine. That's amazing. Yeah. You'll pull out all the gross stuff and just have It's pure glass

Speaker 2: of water.

Speaker 13: Some water. Did we did monsters the other day where we removed all the water from five monsters and then, drank the concentrate which was just a super caffeinated syrup.

Speaker 2: Oh, That's insane. Sounds like a