Online jewellery seller BlueStone has raised around Rs 200 crore in Series-D funding, which was led by IIFL and Accel, with participation from IvyCap Ventures, Kalaari Capital, and RB Investments.
With Series A of $5 million in 2012, Series B of $10 million in 2014, and Series C of $15.8 million in 2015, BlueStone already had $30.8 million in its kitty. With the latest round, the company has $60 million in total. Founded in 2011 by Gaurav Kushwaha and Vidya Nataraj, BlueStone also has Dragoneer, Saama Capital, Ratan Tata, and Meena Ganesh among its backers.
Gaurav, who is the CEO, told YourStory that BlueStone will invest in building a wholesome designer ecosystem by getting more talented jewellery designers. The website sells its own designs, and has 5,000 listings. In four years, it aims to host 30,000 listings, the highest for any online player.
Speaking on the latest fund raise, Vani Kola, Managing Director, Kalaari Capital said in a statement, “BlueStone.com has a high quality team and has grown rapidly over the last year. With the strong foundation and this capital infusion, we believe BlueStone.com is well-positioned to build a large online jewellery brand in India.”
The jewellery market in India is around $60 billion. Tanishq, at $5 billion, is the biggest retailer in Indian offline sector. There are four more jewellers at more than $1 billion valuation.
But the challenge that online players face is customer adoption. “We need to tell customers about benefits of buying online. So our competition is not with online players but with offline ones,” explains Gaurav.
Jewellery is one of those few categories where customers focus on design and quality, not discounts. But offline store customers are able to find out what these shops have only after they walk in, unlike in online stores where they can spend hours browsing and finding what they want. Gaurav says, “We understand the need for touch and feel for a high-value purchase. Hence we launched home trial option to customers last year. We are not considering offline stores.”
BlueStone has about 400 people in its team across various functions. It is a vertically integrated company in jewellery space. “We are a tech company, not just an e-commerce company – so we have engineering, online marketing, and in-house designers, jewellery presentation, new technology, jewellery consultants who attend to people’s queries, and home trial team. We have our own logistics, factory, and people to go and acquire the raw materials,” Gaurav adds.
BlueStone is targeting a four-fold increase in revenues to touch Rs 1,000 crore by 2018. Being a niche market, experts believe that there is no space for more than three online players in this sector.
More customers are becoming comfortable buying low-value jewellery without visiting the jewellers as they come with a guarantee certificate. And the offline biggies are watching. In May, Titan group acquired majority stake in Tiger Global-backed online jewellery startup CaratLane. This is the first successful exit for Tiger and first major investment in an e-commerce firm.
Although online sector is not even one percent of the retail jewellery sector in India, faster Internet penetration and rising disposable income are expected to give the industry a boost.