Diamond deals start warming up

As Gemvara gets acquired by Warren Buffett's company, Titan picks up majority stake in Carat Lane and SDiX gets backed by Temasek's unit, diamond deals and M&A are witnessing increased traction.

Diamond
[Image Courtesy: Borsheims, Berkshire Hathaway]

At a time when two schools of thought exists regarding whether the diamond industry has started recuperating from its low phase or not, it has at least started to warm up again on the M&A front. Some recently announced diamond deals only indicate an increased traction in the diamonds deals and M&A space.

Warren Buffett’s subsidiary buys Gemvara

Boston-based Gemvara started in 2006 providing selling to jewelers and selling custom made jewelry online. It has raised more than USD 51 million in VC funding till date. But till past few years back, the company was facing trouble with a high burnout rate of around USD 1 million a month, at least till late 2014. However, in the past year and a half, Gemvara put its act together and has made itself profitable. Last week, Gemvara announced that it has been acquired by Berkshire Hathaway’s subsidiary – Richline Group. Richline is into jewelry manufacturing, marketing and distribution, and by acquiring Gemvara the former will have access to Gemvara’s ecommerce solutions and in-store digital technology for its brands and customers, for companies both within and outside the Berkshire Hathaway’s portfolio. The terms of the deal has not been disclosed yet.

Titan acquires majority stake in Carat Lane

Watches, Jewelry and Eyewear maker Titan, part of the USD 108 billion TATA Group (which also acquired the iconic British car maker Jaguar Land Rover few years back), has acquired a majority stake (51%) in India-based jewelry e-tailer Carat Lane. Carat Lane is a leading jewelry e-commerce player in India and has raised USD 50+ million from Tiger Global till date. Founded in 2007, Carat Lane later developed an omni-channel strategy, where apart from its e-commerce portal it also established 13 physical stores across the country. Titan, which owns its jewelry retail chain Tanishq, will acquire the stake from Tiger Global and post completion of the transaction Carat Lane will become a subsidiary of Titan. Deal value, terms and other details however has not yet been disclosed and will be done expectedly in June 2016, post completion of due diligence. Interestingly, Carat Lane’s competitor BlueStone has raised funding from TATA Group Chairman Emeritus Ratan Tata, although in his personal capacity.

Temasek backs Singapore Diamond Investment Exchange

Singapore Diamond Investment Exchange (SDiX), world’s first commodity exchange for physically settled diamonds and which operationalized last week, got backed by Singapore state investment company Temasek Holdings’ VC unit – Vertex Venture Holdings. SDiX has started with spot trading and plans to enter into derivatives and exchange-traded products in future. According to a report, Vertex Ventures has a 19% stake in SDiX. After the early investors, Temasek’s backing comes as an additional support to SDiX.

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