While venture capitalists have long acknowledged the need for water technologies, investments have been few and far between.

But a flood of announcements in the past week from companies that aim to produce clean drinking water more efficiently could be evidence that the drought of cash for water treatment might be over.

Seven Seas Water, a St. Thomas, Virgin Islands-based company that desalinates water -- or makes salty water drinkable -- for Caribbean towns and resorts, has raised $20 million in venture funding, VentureWire reported Tuesday (also see this VentureBeat post). TPG Growth and DFJ Element led the round, with Virgin Green Fund, Advent-Morro Equity Partners and CEO Doug Brown contributing.

Last week, Funding Roundup: Cash for Coal, Cars, Wind and Water).

Stanford Venture Capital Holdings said it would invest $10 million in AquAgro Fund, a Tel Aviv-based venture-capital fund that chose water treatment for its first investment (see Funding Roundup: Getting Votes, Wrapping up Deals). The fund put its first bet of $4 million on Advanced Desalination Technologies, a Har Adar, Israel-based company with technology that it claims can desalinate water more efficiently, according to the Globes (via CNET).

The past few months have seen a trickle of water-technology news, which certainly wasn't the norm just a year ago (see Water Investment Picks Up and Parched for VC Funding).

While the demand for efficient water-treatment technologies is on the rise, driven by increases in energy prices and a growing population, investment in the space has not historically matched that demand.

According to the Cleantech Venture Network, venture-capital investments in water technologies plummeted to $77 million in 2006 from $128 million in 2005, in spite of a U.S. Environmental Protection Agency prediction that the United States will need to invest $267.8 billion for 74,400 water systems within the next two decades.

Analysts cite the heavy subsidies and regulation in the U.S. water market that can make it difficult for new players to penetrate. And Michael Bevan, managing director of DFJ Element, one of the investors in Seven Seas, said in October that water desalination and treatment is "an area that's dangerous for early stage investing," but that he believes the highly regulated water prices in the U.S. will change (see VCs Say Water Industry Should Take Lessons From Energy).

And maybe the tide is turning. Take Tampa Bay Water, which last week announced that it had reopened a 25-million-gallon-per-day desalination plant after a 10-year struggle to stay afloat.

The facility is the largest desalination plant in the United States -- it's expected to treat at least 10 percent of the drinking water for Florida's Tampa Bay area -- and its difficulties have long been a poster child for the water-treatment industry's troubles.

For instance, in a May press release for a Frost & Sullivan report titled "Advances in Desalination Technologies," research analyst Rebecca Bright pointed to the project to underline the need for pretreatment to remove particles before desalination.

"The Tampa Bay project … , which was supposed to be commissioned by 2003, is a good large-scale example of the failure of a due to the lack of proper pretreatment facilities," she said in the release.

So the Tampa Bay reopening is seen as a powerful symbol that the challenges faced by the water-purification industry are not insurmountable.

Seven Seas, which was founded in 1997, surely hopes it will be seen as another example of success.

The company designs, builds and operates desalination and wastewater plants, which are crucial in areas like the Virgin Islands, where fresh water is scarce. According to Seven Seas’ Web site, the company is the largest provider of potable water in the U.S. Virgin Islands and has a growing presence throughout the Caribbean.

Seven Seas will use its new $20 million to construct additional desalination plants, as well as a water-reuse project, according to Chief Operating Officer Mario Mondo.

He does not seem worried about the private sector’s hesitancy to invest in water purification. "[The company] has many years of experience and market expertise, and is placed in a market where there is a significant amount of opportunity," Mondo said.