Ratan Tata-backed Bluestone in talks to raise Rs200 crore

Venture capital firm IronPillar may lead funding round along with existing investors Accel Partners, Kalaari Capital and IvyCap

Sayan Chakraborty, Shrija Agrawal
Updated8 Jun 2016, 12:44 PM IST
Bluestone.com is one of the early start-up bets of Tata group chairman emeritus Ratan Tata.<br />
Bluestone.com is one of the early start-up bets of Tata group chairman emeritus Ratan Tata.

Bengaluru/Mumbai: Online jewellery retailer Bluestone.com, one of the early start-up bets of Tata group chairman emeritus Ratan Tata, is in advanced talks to raise about 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.”

This person added that this is also evident in the participation of existing investors in the new round.

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 250 crore in 2015-16, and is expected to grow it to 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 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 declined comment.

Iron Pillar, Accel Partners, Kalaari Capital, and Ivy Cap Ventures did not respond to emails seeking comment.

In September 2014, Bluestone became Ratan Tata’s second investment in the e-commerce segment, after online marketplace Snapdeal (Jasper Infotech Pvt. Ltd). Tata has so far invested in at least 30 start-ups in India and elsewhere.

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 (Caratlane Trading Pvt. Ltd).

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.

Apart from CaratLane and Bluestone, another well-funded start-up is the Jaipur-based Voylla.com, which raised $15 million from Peepul Capital in October. Both Flipkart Ltd and Amazon India (Amazon Seller Services Pvt. Ltd) have launched jewellery as a category on their online marketplaces.

According to industry experts, the online jewellery market will be powered by women aged between 22 and 40. “The initial hesitancy of buying high-value items online has gone away with high-end mobile phones, televisions and furniture being sold online,” said Sreedhar Prasad, partner-e-commerce, KPMG India.

Prasad said there are several reasons why people buy jewellery, from weddings to investments, religious beliefs (buying jewellery on certain days is considered auspicious) to fashion. Most of those buying for the last reason are women aged between 22 and 40 in the 10 largest cities, he added. For them and for those buying jewellery as an investment, convenience and speed matter, Prasad said. “Indian e-tailing market grew not just because of reach and discounts but also the impulsive shopping nature of customers. With a large catalogue and attractive price points, there is a possibility that online jewellers will attract impulsive customers.”

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 251,000 crore in 2013 and is expected to cross the 500,000 crore=mark by 2018.


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First Published:8 Jun 2016, 12:44 PM IST
HomeCompaniesStart-upsRatan Tata-backed Bluestone in talks to raise Rs200 crore

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