Partly’s app lets a mechanic at a repair shop take a picture of a damaged vehicle with their smartphone.

The start-up’s AI, “Interpreter”, can then help them assess the level of damage – and whether it’s worth repairing – and identify damaged parts and help source replacements.

To a layperson, taking a photo of a car part then having an AI identify it might not sound that hard.

But Fawcett says with hundreds of makes and models of cars, each with thousands of parts, things quickly get complicated. All told, there are around four billion combinations of parts that can be ordered across different makes and models of cars – and a mix of phone calls, faxes and spreadsheets have been used to try and keep track of them and source the best options. There were some databases, but they didn’t talk to each other or could glitch over different terms, from the well-known – Americans saying “hood” for what we call a bonnet – to countless lower-level erratic naming conventions.

On some levels, things have only been getting worse.

“Over the years, vehicles have become more and more complex, making them harder and harder to repair,” Fawcett says.

Zooming out to the past century, cars have become about 100 times cheaper to make – ignoring the cost of the raw materials – but around four times more expensive to repair, he says.

Fawcett recruited a team of data scientists to automate the process of matching parts.

His team has spent most of five years training Interpreter to recognise parts and recommend the best options – for customers who range from parts makers to wholesalers and distributors to collision repair shops.

It what can be a low-margin industry, Fawcett pitches Partly’s AI as a way to increase profit by making faster, smarter choices about replacement tasks, and by freeing staff from repetitive, time-consuming tasks.

How the new funds will be spent

“Contracted revenue has just topped US$50m,” Fawcett told the Herald.

“We’ve got just over 1000 customers now. The UK is our largest market, with around 400. New Zealand is second, on around 300. The US is third.”

The founder says Partly won’t be consistently profitable for another two years or so, “but we’ve already had profitable months.” But for now, like many start-ups, it’s prioritising growth over getting black most of the time.

The Series B raise was denoted in US currency because it was led by DST Global, a venture capital firm founded by Israeli tech billionaire Yuri Milner, which has offices in Silicon Valley, New York, London and Hong Kong.

It followed a $37m round at a $180m valuation [both NZD] that was billed as the largest Series A raise in New Zealand history.

In 2021, Partly just raised $3.7m at a $49.8m valuation in a seed round led by Australian VC firm Blackbird, with Beck also chipping in.

The US$50m in new capital is earmarked for more Interpreter training, and expansion in the US. A Partly office was opened in Texas in June. Fawcett is now dividing his time between Christchurch and Austin.

“We expect that in the next nine to 12 months, the US will become our biggest market,” Fawcett says.

How does he sell Christchurch?

It will also be used to get more bodies on board. Partly currently has around 170 staff (with around 100 in Christchurch; others are in Auckland or offshore satellites). Fawcett will be hiring at least 60 more over the next few months. Many will be in Christchurch, which Fawcett sees remaining his firm’s research and development hub long term.

“Most of our staff are from outside Christchurch. About a third of our core Christchurch team have been brought in from the US,” Fawcett says.

“About 30% have come from Europe and about 10% from Europe.

“It’s not what we planned. We hire locally when we can. We still do, probably once a month. It’s just that Christchurch has quite a small talent pool and we set a very high bar.”

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How does Fawcett sell Christchurch to AI experts in New York, or just north of the Bombay Hills?

“It’s a good family city,” Fawcett says. “It’s safe. The cost of housing is lower and there are quick commutes.” It doesn’t hurt that some of New Zealand’s most scenic spots and best skiing is close by.

“There are a whole group of Americans and Europeans who are keen to get out of the country they live in, for whatever reason, and live in New Zealand – and we’ve been somewhat successful in attracting them,” Fawcett says.

Backed by his old boss, Sir Peter Beck

Creating a simple app for mechanics has necessitated hugely complicated algorithms under the bonnet.

It’s fitting to call it rocket science.

Between graduating with an honours degree in engineering from Canterbury University and founding Partly in 2020, Fawcett spent four and a half years at Rocket Lab as a navigation and control engineer.

While working at Sir Peter Beck’s firm, Fawcett had a side-hustle: an online marketplace called AllGoods, which was where he first noticed the problems people had sourcing car parts.

Beck told a group of University of Auckland students last month that he never frowns on staff who have the initiative to found their own start-up. Rather, he’s supported the likes of Craig Piggot (Halter), Jamie France (Outlier Space) and Stefan Powell (Dawn Aerospace).

In 2020, Beck backed a $1.7m “pre-seed” round that helped Fawcett get Partly up and running and agreed to act as an adviser.

The Rocket Lab founder was also good for some press. “They are certainly one of the most exciting start-ups in New Zealand,” Beck told the Herald as the firm banked its seed money.

Car park nights

Having an e-commerce market as a side hustle didn’t mean Fawcett was slacking at his day job.

“I loved Rocket Lab. It was a punishing environment for some people, in that we could work seven days a week. I remember a back-to-back stretch of 60-something days non-stop, but it was super-fun.

“We were trying to be only the second private company to put a rocket into space. SpaceX did it with 2000 people. We were trying to do it with – at the time – 200.”

He slept in Rocket Lab’s Mt Wellington car park to save time.

“I would wake up in the morning at 7 o’clock and read Nasa papers and do research. From midday through to 1am, I’d be building. Then I’d go back to my car for six hours, then wake and do it all over again. I’d eat and shower at work.”

What sort of boss is he at Partly?

“People are not working 60 days straight, but people are still working way harder than average,” Fawcett says.

“An 80-hour week is fairly normal, 100 hours is a big week. 120 hours is a massive week. That’s not performative. That’s just the end result of people caring a lot, being very mission-oriented, and working super hard to solve global problems. Our overall goal is: Anyone can fix anything. That’s the final end state, so it’s ridiculously ambitious.

“We let every new joiner know. They opt in.”

Fawcett adds, “I’m very demanding. I set a high bar, but I give people a huge amount of autonomy to achieve it. There’s a huge amount of freedom, and trust. If someone wants to leave to pick up their kid at 3pm, nobody cares. But they’ll probably be back online at 7pm.”

Competition on the horizon?

“We were training AI models in 2021, before it was cool,” Fawcett says.

His firm’s Interpreter is still the only full-blooded product in its niche, “But now there’s a handful of start-ups that are trying to replicate what we’re doing,” Fawcett says.

AI technology can give them a jumpstart – “or at least the impression they can jump-start” – and the venture capital boom around AI means they can now raise more money, sooner, to accelerate their efforts.

And what’s to stop a mechanic just point their smartphone cam at a part and asking ChatGPT, Claude or Gemini to identify it, and help manage a repair?

The Herald obviously isn’t the first to ask this question.

Partly has published benchmarks that find its Interpreter up to 20 times more accurate than the “general purpose” models made by OpenAI, Anthropic and ChatGPT.

“We’ve got 110 people right now collecting all this information, training our model to be just really good at that one thing.”

Venture capital firms seem convinced. Ahead of the June Series B raise, Fawcett spent a week in San Francisco talking to a slate of top-tier VC outfits.

“Then DST said, ‘We’d like to lead.’ We flew over to Yuri [DST’s London-based founder]. We chatted for half a day, then there was a signed term sheet and, six days later, we had the money in the bank.”

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.