June 08, 2016: Bluestone.com, Online jewellery retailer and one of the early start-up bets of Tata group chairman emeritus Ratan Tata, is in advanced talks to raise about Rs.200 crore in a fourth funding round led by venture capital firm Iron Pillar, said two people aware of the development.
Existing investors Accel Partners, Kalaari Capital and IvyCap Ventures will also participate, they added, asking not to be identified.
Iron Pillar, a fund focused on mid-stage technology investments in India, was founded by Anand Prasanna, who was previously with Morgan Creek, a global investment management firm, where he helped manage its Asia portfolio out of Shanghai. Sameer Nath, another founding managing partner, was till recently head of mergers and acquisitions (M&A) at Citi Group Global.
In its debut investment in India in February, Iron Pillar participated in a $200 million funding round in Snapdeal, led by Canada’s Ontario Teachers’ Pension Plan.
The impending investment is also proof of a turnaround at Bluestone, said one of the two people cited in the first instance. “Bluestone has been growing really well. It had a brief period of rough patch last year, mainly because of funding, but came out of it really well.”
Bluestone, owned by Bluestone Jewellery and Lifestyle Pvt. Ltd, was founded in 2011 by Gaurav Singh Kushwaha and Vidya Nataraj. The company strengthened its top deck by hiring former TaxiForSure chief executive Arvind Singhal as chief operating officer in September.
The firm had an annualized revenue run rate of Rs.250 crore in 2015-16, and is expected to grow it to Rs.1,000 crore over two years, Singhal told news agency PTI in a March interview. He added that the company was serving about 5,500-7,000 orders a month, with an average ticket size of about Rs.25,000.
Bluestone raised $5 million in 2012 in a Series A round from Accel Partners and Meena Ganesh, founder of Portea Medical, followed by another $10 million in a Series B round from Kalaari Capital, Accel Partners, Saama Capital and InnoVen Capital, a venture debt firm, in March 2014.
It raised $15.8 million in a Series C round last July, from IvyCap Ventures, Accel Partners, Dragoneer Investment Group, Kalaari Capital and Saama Capital. Early backer Accel has been a consistent investor in the firm at every stage.
Bluestone’s fund-raise comes barely a month after Titan Co. Ltd acquired a majority stake in its biggest rival, the Tiger Global Management-backed CaratLane.
According to Tracxn, a company which tracks start-ups, India is home to about 93 online jewellery start-ups. Out of them, eight have together raised about $107 million from investors.
Bluestone’s latest fund-raise comes at a time when there is a slowdown in early-stage deal-making and late-stage deals are particularly difficult to come by.
According to Preqin, a research firm, eight Series B deals were struck between January and March, as against 10 such deals a year ago. Deal value shrunk from $130 million in the December quarter to $34 million in the March quarter. The report further adds $53 million was raised in four Series C deals in the first quarter of 2016 as against $179 million in three deals in the December quarter.
According to a report by consulting firm AT Kearney and the Federation of Indian Chambers of Commerce and Industry, or Ficci, the domestic gems and jewellery market in India was worth Rs.251,000 crore in 2013 and is expected to cross the Rs.500,000 crore=mark by 2018.
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