Bay Area startup ElectrIQ raised a $6 million seed round to support its challenge to the home storage incumbents.

Earlier this month, the company released a new product, the PowerPod, which packs 11 kilowatt-hours of energy capacity, an inverter and smart home integration into one $8,999 package. That left the question of how a 17-person startup could sustain competition with the likes of Tesla’s Powerwall or LG Chem’s Resu.

The company offered up some answers this week.

It has raised $6 million in a combination of debt conversion financing and new equity financing. GreenSoil Building Innovation Fund, a Canadian firm backed by real estate owners and developers, led the round, which also included several dozen unnamed smaller investors.

“This provides sufficient capital to get us to scale in the volumes and manufacturing that we’re expecting next year,” said Frank Magnotti, the board member who stepped into the CEO role with the financing. He previously co-founded Comverge, which linked up gigawatts' worth of demand response capacity and made it to an IPO, then went private again, and recently was acquired by Itron.

ElectrIQ co-founder and founding CEO Chad Manning has moved into the chief strategy officer role to focus on product development.

The financing also will support expanding ElectrIQ’s network of trained installers, beefing up the sales force and continuing research and development for new products.

It’ll need that in order to compete with Tesla, which popularized the home storage concept, or LG Chem, the major South Korean manufacturer that has popped up in many of Sunrun's solar-plus-storage deployments.*

ElectrIQ can act more nimbly to create a product that pleases customers, Magnotti said. Unlike those two competitors, ElectrIQ only makes storage systems; it isn’t a side hustle for a larger business.

The smart home integration presents another differentiator.

Sonnen’s U.S. branch staked a claim on storage for the connected home with a splashy launch at the luxury home automation industry conference in September. Its ecoLinx system clocks in at $26,000 and integrates with automation protocols used in bespoke networked lighting, security and audiovisual overhauls for luxury homes.

That leaves an opening for ElectrIQ to woo smart home adopters at a lower price point, with the kind of lightbulbs customers buy in a store and program for themselves.

GreenSoil’s network of innovation-hungry real estate interests offers a third differentiator. The VC firm serves as a clearinghouse for technologies that could be useful for the builders among its LPs. It went so far as to install an ElectrIQ system at a building in Toronto as part of its due diligence.

“We became a customer first, and then we became an investor,” said Jamie James, general partner at GreenSoil. “We can de-risk through our own experience.”

In the way that Energy Impact Partners invests and then links startups to the legacy energy companies that finance it, GreenSoil could open doors to get ElectrIQ into housing developments more quickly than it otherwise might. Getting energy storage into new builds reduces the cost of installation compared to retrofits, and it wraps the sticker price into the larger home purchase, making for an easier sell.

Sonnen has made homebuilder partnerships a mainstay of its U.S. strategy; it’s working on a roughly 3,000-home project with Mandalay Homes in Arizona. It's also much further along in the fundraising department, with a $71 million round in May bringing its total to $180 million.

ElectrIQ has announced a pilot with Mattamy Homes, also in Arizona, as a test run for wider deployment of energy storage in sustainably designed homes.

“We’re seeing it going much more toward a standard feature, like having a refrigerator in your house, as opposed to a ‘nice to have’ or add-on feature,” Manning said.

Manning has stated his desire to take energy storage to mass-market adoption. Although $6 million alone won't fund that, it gives his company a chance to prove it can win customers and move units in a still-nascent market.

*This article was updated to clarify that ElectrIQ is competing with storage manufacturers, not distributors.