Memo: Kinicho

Coming at #3, we have… Kinicho! Kinicho is leading the way for Spatial Audio 2.0 with their Sonic Reality Engine. They sell audio monitoring tool plugins, cross platform libraries and SDKs, firmware for headsets and serverless infrastructure for streaming services all powered by the engine.

Brief History of Spatial Audio

The concept of spatial audio has actually been around since the mid 1500s, when religious directors would find ways to use a combination of choruses and two organs facing each other across pews to manually create “surround sound.” This was not technologically achieved until the mid 1950s when Pierre Schaeffer figured out how to arrange the speakers in his studio and utilise tape recorders and multi-channel playback systems to digitally create surround sound. More recently, in 2012, Dolby created its Atmos technology, which enabled sound designers to direct audio not only to speakers, but also to specific locations within the room.

Long term, audiotech is moving to dynamic singularity where sounds become more “real.” However, development of this tends to be dominated by universities and research groups, and not enough by audiotech founders and engineers. As online moves towards the metaverse, whatever it turns out to be, consumers are forecast to spend more time online in 3D worlds to socialise, work and play. There's a lot of activity taking place to accelerate this migration from the physical world to the digital realm, but also from the Web 2.0 world to the metaverse orientated realm of Web 3.0. Sensory interfaces like spatial audio are key to this momentum.  

Potential Market Opportunity

The moment they started running through some classical tracks and some snippets of a documentary, my teammates and I were hooked. The voice overs were lifelike and felt like being live in a recording studio. The background environment chirping reminded me of walking in a forest at 9pm. The small details of the instrument cadences were audible, down to the tiniest pluck of a violin string. All of these details may not matter as much to a casual music listener or computer gamer, but to a true audio aficionado and Kinicho’s B2B target market, this is game changing. The closest analogy is food: those who don’t care about flavours are happy with a £2 Big Mac, and won’t be able to properly appreciate Salmon Sashimi from Nobu.

Spatial Audio is massively undervalued by comparison to its importance as part of the 'immersive experience.’ This mis-valuation stems from the Spatial Audio 1.0 quality, which is very underwhelming. There isn't a great deal of innovation in the experience, with the same underlying technology being utilised since 1971. Because of this, Spatial Audio 2.0 can boost market value heavily. In addition, because of its outstanding technology and versatility, its applications are widespread, from video game development, media/content production, platform development and hearable manufacture. Reflecting this versatility, Kinicho’s total market size sits at over £75 billion. Although there is a chance that a big audio company such as Apple or Dolby could attempt to create a similar technology to Kinicho, we believe that with the combined assistance of both our capital, support team, and cooperation with their other investors, we’ll be able to help Kinicho penetrate the market quickly and set them up to be a nice acquisition target for larger companies.

Potential Challenges

From a fundraising and marketing standpoint, it’ll be interesting to see how Kinicho will be able to convince both investors and potential customers about the power of their audio technology without setting up a demo. We know that Dan Bowyer from Superseed VC got a chance to run through it, but not every investor will get a chance (or even be willing) to really physically test it out. Without testing it, the deck starts to look like every other deck in the audio infrastructure space, and words such as “better quality than its competition” ring hollow with no context.

Another challenge they face is the way they’ve designed their business model, they are almost making their ideal customers self-select. Approximately they’ve figured out who’s going to get the most amount of value from this but which specific demographic will purchase Kinicho technology the most?

Founder + Team Potential

Garry Haywood and his team are the right group of people to revolutionise the spatial audio sphere. Garry himself has had eons of experience working in audio, having worked as a DJ and producer and regularly speaking on spatial audio and innovation practice. In addition, Garry has had plenty of practice running different startups, ranging from a big data platform to analyse changes in the UK business population to helping companies on business development. What really impresses us about Garry is his tenacity as well as his in depth understanding and knowledge of the dynamics of spatial audio. Even though our investment committee pummelled him with tough questions ranging from feasibility to engine integration, he calmly tackled them one by one.

Stefan Kazassoglou is his co-founder and has a long term working relationship with Garry that spans two decades. Stefan is an audio engineer and coder with audio post-production credits in music, cinema and art. His love of solving deep problems in both production methodology and audio signal processing is the inspiration behind the Sonic Reality Engine. He graduated as part of the inaugural alumni at the prestigious Liverpool Institute for Performing Arts, the Paul McCartney backed talent factory for the global entertainment’s industry. Stefan has a long history of innovation in digital audio as a founder of the first all-digital recording and post-production studio in the UK. He later founded BinaryCell, the world’s first Surround Sound Nightclub and Studio production complex, where he designed and built the audio systems infrastructure. He brings together technical acumen, a deep theoretical understanding of the science.

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