Make way for another startup that wants to shake up the world of music and audio technology. Devialet, the French developer of high-end speakers and the IP behind the sound systems that make them go boom, has raised €100 million ($106 million). This is a strategic growth round that is bringing in a number of high-profile new investors — and with them, a lot more audio opportunities for the Paris-based startup.
In the words of co-founder and CEO Quentin Sannie, Devialet’s ambition is to change how we hear sound from any device. “We have developed some very breakthrough sound technology,” he said in an interview earlier today, “and we think it has the ability to be the reference technology for all audio in the future.”
The Series C round, one of the biggest ever for a startup in France, was led by Ginko Ventures, Foxconn’s European investment arm, and also included participation from Foxconn itself, carmaker Groupe Renault, Sharp Corporation (now owned by Foxconn), Andy Rubin’s Playground Global (which itself is raising $500 million for a new fund), Jay Z’s Roc Nation, and Korelya Capital, an investment fund headed by Fleur Pellerin (France’s former Secretary of State for Digital affairs) in partnership with Naver and its subsidiary Line.
Other investors in this round include Qatar’s Future French Champions, CM-CIC Investissement and BPI France.
Devialet is best known today for two speakers that it has produced (both made in France): the Expert, which retails for multiple thousands of dollars; and the Phantom, a smaller device that sells for around a more “modest” $2,000.
These speakers have won a ton of awards and rave reviews for what is a radical approach to producing sound: Devialet has figured out a way of removing all distortion to produce a giant sound with a strong bass line, from what are otherwise pretty compact pieces of kit. Devialet complements this with a slick design and gesture-based controllers.
Some may balk at the price. But audiophiles who hear the speakers “fall in love” with them, Sannie claims. “The product speaks for itself, and we seduce our customers. The Phantom is a very emotional experience.” And, if you have the financial means, it seems to also be a very acquisitive and addictive one, too: Andy Rubin has bought 160 Phantom speakers (not just for himself; but to help spread the word about them among his friends).
“I am a huge fan of Devialet,” he said in a statement. “I love the technology and the team. I believe Devialet is the most disruptive company in the audio business. It is my dream to work with Quentin and his team to change the way people appreciate media of all types. I am very proud and happy to take part in this financing.”
But speakers is not all that Devialet has been building. While the company will continue to expand its brand with its own hardware, it also has plans to embed its tech to work in consumer electronics and other connected devices made by others.
This is where the list of strategic investors will come into play. The plan is to embed Devialet’s audio tech in TVs made by Sharp, cars made by Renault, music services (think Jay Z’s Tidal or Naver’s Line Music), smartphones, and the many more devices that complement and compete with these. If they pull it off, it will democratise Devialet’s technology beyond its own high-end, expensive speakers, and make hearing it much more ubiquitous.
“You can find sound in more than 3 billion products sold ever year around the world,” Sannie said. Whether the partners that Devialet is securing with this investment will be the ones that can catapult its technology into more hands will remain to be seen — it will take both successful integrations and then consumers to buy the products. But it is a start.
While we have heard and seen a lot of development in the area of speech recognition and voice interfaces for AI-based personal assistants, audio services have (ironically) been something of a quiet counterpart. If voice interfaces are a big part of the future of how we will interact with our connected devices (indeed, they already are), you can think of what Devialet is developing as the other side of the coin: the aural experience.
The two are, of course, connected. A person will know how to change the tone she or he produces based on what is being heard and sensed: speaking louder in noisy rooms, or more quietly in an emotional or sensitive situation, for example. The same, in a way, could apply to smart audio services.
“Devialet is a tech company. We know a lot about signal processing, but the way we are using it is more today to put the signal out,” Sannie said. “But because of our technology we are able to do the contrary to make something inverse… In an autonomous connected car, the entertainment, the audio experience for the sound, the acoustic even for the silence will be more and more important.
“You will have an electric car producing silence and this should be perfect. We will need more entertainment, but we will also need to deliver safety information and driving information to the driver or person in charge. The acoustic experience will have to be a part of this industry. Because we are able to provide the sound we can also cancel the sound, and because we can cancel the sound we are also able [single out sounds] like a voice and its commands.”
The startup has so far filed 107 patents for its audio codecs, reference designs and other technologies, and it’s adding more to that each month, Sannie says.
Other areas where Devialet plans to use some of its investment is to continue building up its retail operation.
Today the company has flagship stores in Paris, London and New York City, and it will be adding more of these into key retail locations. The company also struck a plum deal with Apple in 2015 to sell its Phantom speakers in its retail stores. That retail relationship will continue, as any consumer electronics deals that Devialet may sign with its investors or others are not exclusive.
Sannie got very tight lipped when I asked if Apple is among those that are working with Devialet on any products. It’s a logical question: with its acquisition of Beats in 2014 for $3 billion and reported interest in Tidal, Apple has demonstrated that it is also keen to develop high-end audio experiences. For what it’s worth, Sannie did note that Apple was aware of the investment as it was being made.
This latest round brings the total raised by Devialet to around $155 million to date, and while Sannie would not disclose Devialet’s valuation with this round, we’re still trying to find out. (My guess was $300 million; one source says lower.)
While previous investors Bernard Arnault, Jean-Antoine Granjon, Xavier Niel and Marc Simoncini did not participate in this round, they are remaining on the board with this financing. Others joining them are Caroline Giral of CM-CIC Investissement, and Marc Auberger of FFC as observers.