Basis, the most successful Kiwi start-up you’ve never heard of, raises $38m

A money man and a power man joined forces to create Basis – which raised $38 million to fund a new type of switchboard for homes that could shave up to $1000 per year from electricity bills. It won’t launch until the new year, but they’ve already sold 5300 units. Chris Keall caught up with one of its founders.

About four years ago, Danny Purcell was talking with his wife Brigitte Purcell and friend Julyan Collett about how New Zealand homes were out of step.

People were electrifying and buying new tech like heat pumps, solar panels and electric vehicles (EVs), but their house’s electrical switchboard was pre-digital. They thought, what if hardware and software could be merged for a more capable power panel and an app that let people know what was going on – and was then able to diagnose electrical problems from afar?

“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,” Purcell says.

New Zealand’s under-pressure grid and rising household electricity bills made the need for an overhaul more pressing.

Swapping sides

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

Around $30,000 of separate switches and electrical features can be replaced by a Basis Smart Panel that costs between $3200 and $4300, founder Danny Purcell says. The more expensive model includes extra features such as integration with solar.

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 New Zealand-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, which comes in three flavours, all radically cheaper (they range from $3199 to $4299).

Basis's Leo smart panel combines with an app to let you keep real-time tabs on which appliances are sucking the most power.

He says most home owners – 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.

And it’s built from the ground up to work with solar panels and batteries and EVs and to supply usage data to power companies. Using less power will be a cost-of-crisis benefit for punters, but Purcell says more broadly it’s a sustainability story.

Protypes line a wall at Basis HQ. The start-up has refined its design over four years of R&D. Photo / Chris Keall

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 are 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 downpayment 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 $17 million worth of product at the firm’s retail pricing, by the Herald’s maths).

Basis says its Smart Panel and app can deliver more accurate usage-tracking and offer easier control over appliances.

There are two major customers so far. The co-founder 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” represent 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 $38m.

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 co-managing partner 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 New Zealand funds.

It’s territory he knows well. Before co-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 New Zealand Superannuation Fund).

Basis’ most recent raise was a $26m Series A round in July this year, led by Global From Day 1 (GD1), which chipped in $10m. An Icehouse presentation promoting the raise gave the start-up 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).

McKinsey alumna Alex Cappy became Basis' COO in 2023, then CEO earlier this year.

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 were Astrix Astronautics, Emrod, Fabrum, Toku Eyes, Zincovery and Zenno Astronautics; how much each receives is still being finalised.) Basis received a $535,000 Project Grant from Callaghan in 2021, plus $127,000 toward internships between 2021 and this year.

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-focused office in Auckland.

3D printers were initially used for every component, with the plastic prototypes gradually swapped out as more and more pieces of the design were finalised.

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 New Zealand 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 New Zealand’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.

"The end goal is global domination, including North America" – GD1's Vignesh Kumar.

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 partner Barnaby Marshall.

“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.”

Danny Purcell: "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 – with a bold vision to install a smart panel in every home."

Marshall 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”.

GD1’s Kumar says, “We have been fortunate to be early investors since 2021. What drew us early was Danny and Julz’ vision for unifying what increasingly felt like a disjointed approach to home energy management - especially in light of all the conjecture about microgrids, energy optimisation, and incorporating clarity into the energy wholesale-to-retail value chain.

“Basis isn’t the first smart panel in the world, but it’s certainly the first in the Asean region, has an ambitious vision to verticalise, richly experienced founders, an exceptional team and it is thinking about the inherent challenges of building a hardware business from a first-principles approach, something I resonated with given my experience at Apple.”

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 New Zealand 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.”

$30-$40m from Australasia, US end game

“The market opportunity is immense but the go-to-market approach is thoughtful, segueing through New Zealand then Australia, conquering Oceania and south east Asia, then accelerating efforts into UK and Europe,” GD1’s Kumar says.

“The end goal is global domination including North America,” the VC says.

“But even just Australia and New Zealand yields a meaningful $30-$40m per year revenue business.”

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.