Xylem Inc. became a strategic investor in Norwegian subsea desalination company Flocean on November 18, 2025, as part of a $22.5 million Series A funding round that brings Flocean’s total capital to $22.5 million (NOK 228 million). The investment places Xylem alongside existing backers Burnt Island Ventures, Freebird Capital, Katapult Ocean, and Nysnø Climate Investments, and new participants Ari Emanuel, Orion, Rypples, and Wellers Impact’s Water Unite Impact Fund.
Flocean’s technology harnesses ocean pressure at depths of 400–600 meters to produce freshwater, offering a 7–8× lower capital cost, a 50% reduction in energy consumption, and minimal environmental impact compared with conventional land‑based plants. The company’s first commercial plant, Flocean One, is slated to launch in 2026, and its build‑own‑operate model sells water under long‑term offtake agreements ranging from 15 to 25 years.
Xylem’s investment aligns with its strategy to deepen its footprint in advanced water treatment and digital solutions. The move follows a strong Q3 2025 earnings report in which Xylem posted revenue of $2.27 billion—exceeding the consensus estimate of $2.24 billion—and an adjusted EPS of $1.37, beating the $1.25 expectation. A record adjusted EBITDA margin of 23.2% reflected disciplined cost control and a favorable product mix, prompting management to raise full‑year revenue and EPS guidance. The financial strength and margin expansion give Xylem confidence to pursue strategic investments such as Flocean.
"Flocean’s subsea desalination technology represents a bold leap forward in how we produce fresh water and address water scarcity—one of the most urgent challenges of our time," said Snehal Desai, Xylem’s Chief Growth and Innovation Officer. "As demand for water accelerates globally, we are investing in breakthrough technologies that have strong potential to scale. This partnership reflects our commitment to solving water.”
Analysts highlighted Xylem’s margin expansion and raised guidance as key drivers of the positive market reaction to its Q3 2025 results. The investment in Flocean signals Xylem’s confidence in the subsea desalination market and provides early access to a disruptive technology that could reshape water production. By integrating Flocean’s platform with Xylem’s global network and expertise through the Xylem Innovation Labs Accelerator, the company positions itself to accelerate Flocean’s commercialization and capture a share of the growing global demand for freshwater.
The strategic partnership also offers Xylem a foothold in a market where traditional desalination faces high capital costs and environmental concerns. Flocean’s modular, low‑energy system could enable Xylem to offer a differentiated, scalable solution to municipalities and industrial users, strengthening its portfolio in advanced water treatment and digital solutions. The collaboration is expected to accelerate Flocean’s global expansion and create new revenue streams for both companies.
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