Base Power raises $1B Series C and opens its first Austin factory to scale home battery storage across Texas

millions of consumers who are using AI to discover new products and brands. Our next guest is MongoDB indeed docysine ramp with some massive news. Uh Justin's been on the show before. We're excited to welcome him from the reream waiting room into the TVPN Ultra Realm. Justin, how are you doing? Congratulations.

There he is. Do we have a massive day? I'm going to grab a copy of that newspaper. Yeah, grab that newspaper. Uh the execution on this is uh insane. Here we go. I got it. Uh well done with this. Uh this is certainly a call to action, but uh uh before we get into it and uh yeah, quick uh quick introduction again.

I know you've been on before, but for anybody that missed the first one, it'd be great. Yeah, really uh good to see you guys again and thanks thanks for having me. I'm Justin, uh co-founder and COO here at Base Power. We're based in Austin, Texas, and uh we're a we're a modern power company.

We uh design, manufacture, uh install, own, and operate batteries on homes throughout the state of Texas and soon to be outside of the state. Uh and we're really excited to be announcing our series C fund raise and the opening of our uh first factory uh here in Austin. Incredible.

Uh what uh break down kind of the uh major kind of milestones uh you know, you can get into the factory as well, but but since the last time you were on. Yeah. So, since uh I'm trying to remember exactly when the last time I was on, but uh we have expanded quite quite meaningfully.

So, uh we're based here in Austin, but we have operations now since we last talked uh in the Dallas Fort Worth market uh in the Houston market and the San Antonio market as well as here in Austin.

Uh and so what that means is that we have a warehouse facility uh uh fleet of electricians and all the accuchants that comes with that to uh own and operate and install batteries uh throughout those regions. Uh we're on now thousands of homes across the state.

We have over well over 100 megawatt hours worth of energy storage. Uh and we're we believe are the largest uh energy storage developer uh and fastest growing uh here here in Texas.

Uh and are really excited to be to be continuing to grow uh and since since we last talked also announced today is our series C is mentioned and that allows us really accelerate $1 billion. There we go. I was waiting for you to hear. Congratulations. Um, no, it's absolutely massive.

I was talking to uh John and I had a chance to chat with your co-founder Zack off the air a while back and uh one of the things that uh that came out of the conversation for me is just how early it is and the opportunity.

And so I wanted to give you the opportunity to talk about uh you know for any people that that might uh consider joining uh or be interested in joining base why today is still so early in the in the overall scale of the opportunity that you guys have. Yeah very very very well said.

So I mean look the grid is the largest physical you know infrastructure asset in in in the world in the US. Uh there are 8 million single family homes that are in, you know, territories that we can serve today and and another four that we will be able to serve very soon just in the state of Texas alone.

That's a massive market opportunity and that's just one out of 50 states. We're in some of the major markets here in Texas and we've grown a lot, but we're we're pretty, you know, pretty small in comparison to the total opportunity here.

And look, I think the the the broader point is that uh and this is, you know, not foreign to you guys or foreign to the subjects on this show often, but uh the world needs a lot more megawws uh for AI, which is the sort of newest, hottest thing, but electrification, EVs, uh heat pumps, and just more population here in the US and around the world.

And the grid is unfortunately not built for where power demand is today, and certainly not built for where it's going. Uh and so companies like like ours uh are are making today a small and in the future a very large impact uh on on the grid's capacity and we're really excited to keep growing into that.

What I'll say is we're we're as you said in the very very early innings of the massive opportunity that we have, the generational opportunity honestly that we have in the energy industry and in particular in the utility and grid part of that uh sort of energy economy um to really continue to add capacity and support all of the other uh companies that are putting EVs and heat pumps and data centers on the grid.

What are you looking for in terms of uh future markets? Like what what are the set of uh you know what is the state of a of an energy market that makes base uh uh that makes it makes it attractive for for you guys to enter? Yeah.

So today we operate in primarily not exclusively but primarily what's called the deregulated market.

So might get get a little bit into the weeds here if you would wouldn't uh you wouldn't mind here Jordy, but uh basically what that means is if you can choose your power provider in Texas, for the most part we can serve you because we become your power provider, meaning we sell you electricity and more interestingly and importantly we put this battery that we designed and manufactured and installed on your home that we use to support the grid.

And so in markets in Texas where you can choose your power provider, that's like no-brainer. That's that's that's where we are today. outside of that in the regulated parts of the state as well as outside of Texas. Uh the way it works is we get a deal with the utility.

So it's a bit of a B2B TOC model so to speak where we get a deal with the utility and then we go in directly to the homeowner and we pitch our offering. The utility sells still sells the power but they are able to access our battery, our distributed battery fleet, our network on their system.

Um and so the best markets for us are those that are first, you know, uh retail choice and then second where the utilities are really forward thinking. They're really thinking about how they're adding capacity to the grid to their particular grid. And importantly, those that have a lot of new demand on their grid.

North Texas, Northern Virginia, and other parts of the US that have a ton of data center demand are obvious first steps for us.

But other areas that have lots of solar or renewables on the grid that require this sort of time shifting of energy or that have aging infrastructure or our islands like Hawaii or Puerto Rico that make it very difficult to manage the grid.

These are all sort of key characteristics that are helpful for us uh as we think about entering new markets. I I'd love to know the internal view on why average US electricity prices have increased so much over the last 5 years. We were just talking about this chart. In 2020, the dollars per kilowatt hour was 14 cents.

Now it's over 19 cents. A lot of people are blaming this entirely on AI. I've heard numbers like 70% of the increase is because of AI. What is your view on why electricity prices have increased over the last few years? Yeah, it's a great question, super topical in this moment.

Um, and just to reiterate, electricity prices have increased meaningfully. If you look at the cost of energy delivered to a home or a business, it's essentially two things. It's the cost of the electricity itself, and then it's the cost of delivery. You buy a t-shirt online, you pay 10 bucks for the for the t-shirt.

you should pay, you know, a dollar or two or three for shipping. In the electricity industry, for instance, here in Texas, you might pay, you know, uh, nine or 10 cents a kilowatt hour for your, uh, for your electricity, but you're going to pay six, some, in some places 7 cents for delivery.

And that cost is going up meaningfully, whereas the cost of electricity is actually declining. Interesting. So, if you look at the mix of the two costs, the cost of delivery is increasing rapidly.

This is the cost of the grid itself and this is really what we're focused on as a company is is is increasing and we want to decrease that. The cost of the electricity itself is actually decreasing because the cost to generate it is going down from solar, nuclear, wind, natural gas, etc.

And so that's that's the primary reason. Uh could I assign a specific percentage to AI? It's very difficult. Obviously that puts more demand on the system. Um but uh AI is not the only usage of of energy. It's the hottest and most talked about one.

Um but EVs alone like adding an EV to the grid is like adding another home. It's like another home was built or even more than that. And so that's pretty significant as well. Uh and uh so anyways, a lot of it is delivery. Interesting.

Uh last time uh yeah, specifically on delivery, what what is how does the BA how does like base make delivery more efficient today? Is that by moving energy around at the right time and storing it? like what break that down like I'm a maybe a venture capitalist.

[Laughter] Um so the way that base uh delivers lowers costs of delivery is very simply by charging when the system is underutilized and discharging when the system is utilized. So the way I think about this is kind of like a road.

Think about the transmission and distribution wires, the poles and wires that you see out in in in America uh as as a highway. and you want to add cars to the highway at 2 a. m. and you want to pull off cars from the highway at 6 p. m. Um, and the reason for that is congestion.

You want to reduce congestion and therefore decrease the average cost of delivery. So, set another way, you can have more demand on the system with without increasing the size of the system. today without batteries.

Every time that the peak demand goes up, the demand of everyone using their AC on August 15th at when it's hot out here in Texas at 5 PM, every time that that goes up, you have to build bigger and more poles and wires.

If you put batteries on those AC units next to those, you know, next to those AC units on homes as we do, now you can turn off that home from the grid, and now that that new home that was built actually doesn't have a negative impact impact on the grid, requiring uh more infrastructure to be built.

Hopefully that was the venture capital explanation. I love it. Perfect. Uh, one last question. I mean, the last time we had the we had you on the show, it was post liberation day. And if I'm being honest, I came away being like, "This is going to be a rough time for Bass. It seemed like it was really hard.

Uh, there were going to be all sorts of uh crazy supply chain issues. " And yet now you're here just a couple months later raising a billion dollars. Like seems like the business is doing really well. What happened? Did all the did all the tariffs that were going to affect you just roll back?

Did you navigate things in a particular way?

Uh was that betting on you guys are betting on you always planned, I'm sure, to bet on yourself in terms of like actually setting up a factory here, but it's just even the whole macro environment just makes it clear like we need to make the you know, we need to make the products that our business depends on.

Yeah, you you got you got it right, Jordy. Um we're betting on ourselves. We're building a factory right across the street here in Austin. Um and uh that is a large portion of how we're able to navigate through some of the the changes that were made during Liberation Day.

We've also been able to onshore and reshore the vast majority of our supply chain as it exists today.

Uh and that's that's thanks to us having a strong engineering and supply chain team that allows us to be able to do that and resource redesign and uh sort of re you know manufacture and probably just being a young company because it's not like oh yeah we have a 50-year builtup supply chain in this one country that got hit with a specific tariff and like pulling that out.

Well, we have 50 people that live over there and they manage our supply. It's wildly different just to be like, "Yeah, we were buying some stuff from this company, this country, and this country, and now we got to it's a lot easier to shift around. " Right. To totally.

And we're we're in control of our own destiny with our with our factory here. Obviously, we don't make every single part that goes into the assembly of the of the battery. And so that is sourced, honestly, a lot of that is actually sourced here in Texas, not even just in the US, but here here locally.

Um, we've been we've been very fortunate to work with a large number of suppliers here in the US on our on our next generation hardware that we're manufacturing, like I said, across the street. that's uh that that that are here locally.

So, yeah, short short answer is uh liberation day was, you know, something that we had to work around and we had to sort of think about and and be considerate around, but um we've always been and we'll continue to bet on ourselves in that uh in that domain. It's fantastic. Well, congratulations. Bet on yourself.

Bet on America. Thank you so much for stopping by. Congratulations. We'll talk to you soon. Yeah, just getting started. Thanks a bunch, guys. Have a good one. See you, Justin. Uh let me tell you about Linear. Linear is a purpose-built tool for planning and building products.

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