Swapping sides

Purcell used to work in investment and venture capital – where VCs invest in many startups, hoping a few big hits will outweigh the many misses that go with the territory.

But in 2020, he jumped to the other side of the fence, to co-found Basis with Collett – an electrical controls expert and former project manager with Laser Electrical (in NZ-is-a-small-town fashion, Collett is also the son-in-law of broadcaster Paul Henry, while Brigette Purcell was one of Henry’s producers during his time at MediaWorks).

Their pitch is that about $30,000 worth of old-school switches and features can be replaced by its digital switchboard, and companion smartphone app, that comes in three flavours, all radically cheaper (they range from $3199 to $4299).

Purcell says there are safety features not available in the usual home-build budget, and others that are world-firsts – including the ability for an electrician to remotely access the panel to diagnose a problem.

He says most homeowners – or builders – would never pay for $30,000 worth of features, instead opting for a more basic switchboard at 10% of the price. The Basis Smart Panel makes advanced features available more cheaply, and adds new ones.

And he says the smart monitoring features could shave up to 25% off your annual power bill – which would be about $1000 per year in some cases.

Using less power will be a cost-of-crisis benefit for punters, but Purcell says more broadly it’s a sustainability story.

Features include surge protection, real-time alerts about faults, and real-time information about which appliance is guzzling what level of power. The app also lets you remotely control power to your appliances when you’re away, or automate what stays on and when.

Purcell says while a Basis panel could not stop, say, a lithium battery fire on a charging e-scooter per se, it can alert you to unusual activity that can serve as a warning of such incidents.

A separate Basis Trade App will give an electrician remote access to your panel for remote diagnosis or fault monitoring.

5300 pre-sales

A dozen prototypes are lined up along the wall at Basis’ office, showing the gradual evolution of its product.

There is now a working prototype, and trials taking place in homes around the country. Purcell says the first product should ship early next year.

Most of the sales will be business-to-business (B2B), although punters pre-order direct through Basis’s website (although as an electrical system, it can only be installed by a registered electrician).

A $200 down payment is required to join the queue, with a January to March 2025 delivery time.

Purcell says 5300 panels have been pre-sold, representing Basis’s first six months of manufacturing capacity (and equating to somewhere north of $17m worth of product at the firm’s retail pricing, by the Herald’s maths).

There are two major customers so far. The cofounder won’t name them but says, “One of the largest developers in New Zealand and one of the large electric wholesale chains”.

Beyond that, Purcell says B2B “partnership opportunities” representing a potential $500m in sales.

Basis is already doing a lot of work with power retailers and the Electricity Authority, Purcell says.

A Movac investor presentation says: “The [Basis] switchboard can be installed by an electrician within 15 minutes versus five-plus hours and allows for better monitoring and control of home electricity usage. Precision-engineered, it processes over 2.3 million data points from over 120 inputs every second to keep families safe and guarantee cost savings on electricity”.

$38m raised

The fundraising side has gone well, to say the least. Kiwi startups in a pre-commercial phase – or even pre-prototype phase, as it was when Purcell first knocked on doors – scrabble to raise a few hundred thousand dollars, if they’re lucky.

Basis has raised $38 million.

The firm has drawn money from Icehouse Ventures (which took a 19% stake), Global From Day One (14%), ACC’s investment wing (6%), Movac (4%) plus various high net worth individuals including Sir Stephen Tindall and Phil McCaw.

Icehouse was the first fund to invest, backing a seed round, Purcell says.

Movac’s McCaw and Global From Day One’s Vignesh Kumar made individual investments that served as precursors for their funds coming on board.

“My background is from the investment world and I think a lot of our fundraising trajectory was based on trust in me.”

Purcell says he’s proud that 95% of the investors are Kiwis or NZ funds.

It’s territory he knows well. Before founding Basis, he was investment director at NZ Growth Capital Partners, a Crown agency that co-invests with private venture capital (VC) firms via its $300m Elevate fund and smaller Aspire fund.

Before that Purcell was with ACC’s investment win (the state accident insurer’s investments are worth about $47 billion, or the largest player outside the $79b NZ Super Fund).

Basis’ most recent raise was a $26m Series A round in July this year, led by Global From Day 1 (GD1). An Icehouse presentation promoting the raise gave the startup an $85m valuation (it also framed the raise as a $35m round, indicating it came up a bit shy in today’s tough VC market).

Last week there was a filip as Technology Minister Judith Collins announced Basis would be one of seven recipients that will share $17.5m from Callaghan Innovation’s annual Ārohia Trailblazer grant (the others are Astrix Astronautics, Emrod, Fabrum, Toku Eyes, Zincovery and Zenno Astronautics; how much each receives is still being finalised.)

Christchurch base

On the product side, there was the major obstacle that New Zealand did not have the sort of lab required for the soft of regulatory testing that would be required for a complete overhaul of switchboard design.

But the success in capital raising meant Basis could build its own.

The panel has been developed over four years, primarily at an research and development facility in Christchurch, although Purcell works out of the more corporate-focussed office in Auckland.

Along the way, Basis has hired more than 100 staff, including ex-McKinsey associate partner Alex Cappy, who became CEO earlier this year.

More than 50 compliance certificates (including AS/NZS 3000 electrical wiring) have been received in six categories, with international and NZ regulators.

Contract manufacturers are lined up around Asia, who Purcell says are capable of scaling up to millions of units.

Why Christchurch?

“The talent pool,” Purcell says.

The city, which has long been home to one of NZ’s largest tech firms, Tait Communications (formerly Tait Electronics) has expanded its ecosystem over the past few years with new companies like Partly (the cloud software contender founded by ex-Rocket Lab engineer Levi Fawcett that raised $37m at a $180m valuation), aerospace firms Kea and Dawn, hydrogen player Fabrum, and EV charger maker Evnex, to name a few.

An iPhone moment

“The future of energy is increasingly electricity, and the future of electrical panels will be a digital smart panel with control and analytics on everything running in the building,” says Icehouse Ventures chief executive Robbie Paul.

“Transitioning from existing electrical panels to a Basis Smart Panel could revolutionise the electricity industry, much like how the iPhone transformed the pre-smartphone era.”

Paul adds: “The Basis Smart Panel will unlock a new economy of opportunities in the energy sector. Electricity retailers, appliance manufacturers, electricians, and grid operators will gain valuable insights from detailed energy consumption data, enabling them to enhance their products and services”.

Purcell says: “Rather than investing billions in updating the existing infrastructure, we believe in empowering individuals to make informed decisions about their energy consumption that transition us from an overloaded electric grid to a dynamic two-way smart grid”.

Offshore push

“We are preparing for sales activities in Australian and the United Kingdom right now and expect to launch in Australia a few months after New Zealand,” Purcell says.

The Smart Panel will be certified for both Australia and NZ under the harmonised ASNZS wiring rules, he says.

“In Australia we’re in advanced discussions with growth-oriented electrical distributors who want to provide electricians with a superior and differentiated offering. Customers are signing up for pre-sales directly from our website, too.”

Purcell sees a UK launch in the second half of next year, then Asia in 2026.

“For markets further afield, we are in numerous discussions with early adopter electricians, with inbound inquiries coming from places as far as Kenya and Saudi Arabia.”

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.