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Startup DaVinci Makes Rapid Expansion

Denver – Startup DaVinci Group has signed up 350 dealers on its way to expanding to 700 by the end of November, co-founder Daniel Kippycash said during the CEDIA Expo.

The group  was formed last November and debuted at CES with a focus on the systems-integration channel. Most dealers are single-location operations, with some operating two to three locations.

The company, which is owned in part by employees, reps, and dealers, will cap its dealer base at 700 to maintain limited distribution and high margins, Kippycash said.

Also to maintain margins, the company eschews Internet sales and national distributors for its three brands: TDG Audio, Vanguard Dynamics, and Blue Aura.

TDG Audio focuses on premium architectural speakers priced from $199 to $699 each and sold only through reps to dealers. Vanguard Dynamics features architectural speakers priced from $99 to $399 each along with multizone amplifiers, speaker selectors and other multiroom-audio products sold through reps, who can choose to sell direct to dealers or to regional distributors. Blue Aura products consist of wireless active speakers and niche products, including an integrated two-channel tube amp, sold under the same distribution policy as Vanguard.

Since its debut, the company has signed up reps throughout the U.S. except for the Ohio Valley region.

Here at the show, the Ontario, Calif.-based company unveiled 24 new products, all shipping, to bring the company’s selection to more than 40 SKUs. The new products include what the company believes are the world’s first architectural speakers to use a dual-voice-coil tweeter that, combined with dual-voice-coil woofers, delivers left- and right-channel information from a single speaker mounted in tight locations such as hallways. Competitors’ speakers that use two tweeters and a dual-voice-coil woofer for these applications generate phase interference that raises distortion, said sales VP Jeff Francisco.

The company also demonstrated three new wireless Blue Aura speakers, including the $449 single-chassis stereo Bluetooth speaker with digital audio input, NFC, and aptX streaming over Bluetooth. The $399 X30 powered two-way bookshelf-speaker pair incorporates the same features, and the $1,299 X90 is a powered tower pair that uses proprietary wireless technology to stream from sources connected to a wireless transmitter.

The company is 10-percent owned by employees, 20 percent owned by 350 dealers, and 10 percent owned by reps. The remainder of the company is owned by Kippycash, co-founder Alex Chiou, and others. Employees and reps were granted shares. The owner-dealers each contributed $2,000 for their shares, in return getting free shipping for all products and a select amount of free products. The dealers also get profit sharing that can be applied to product purchases.

The company has limited the number of dealers who get company shares to 350.

The company’s manufacturer partners have also invested in the company but without taking ownership shares. The factories contributed $750,000 in R&D money, Kippycash said. They also fund the company with product, said Francisco. The factories ship product to DaVinci, which takes title to the products but doesn’t pay the factories until the products are sold.