Bluestone raises Rs 200 cr to boost marketing

Existing investors Kalari Capital and IvyCap Ventures also participated in the round

Bengaluru-based online jewellery start-up Bluestone has raised Rs 200 crore in Series-D funding, led by India Infoline (IIFL) and Accel Partners. Existing investors Kalari Capital and IvyCap Ventures also participated.

As did Singapore-based venture capital fund RB Investments, which has invested earlier in start-ups such as Swiggy, Fassos and CapriCoast.

The investment in Bluestone comes less than a month after Titan, which owns Tanishq, this country's largest branded jewellery entity and a Tata Group company, acquired 62 per cent stake in rival CaratLane for Rs 357 crore, to grow its online presence.

It also validates the growing trend of people becoming more comfortable with making high-value purchases online, especially in a low trust society such as India, the company said.

“With this capital infusion, we are going to further strengthen the growth and get to about Rs 1,000 crore in revenue by 2018,” said Gaurav Kushwaha, co-founder and chief executive of Bluestone. “We are easily on track to achieve this milestone and that’s also the time we will become operationally profitable.”

A big chunk of the new capital will be used for marketing, with the company allocating Rs 40 crore over the next 12 months in this effort. The burgeoning online jewellery market in India today stands at close to $50 million (Rs 330 crore); it is expected to grow to $2-3 billion (Rs 13,300-20,000 crore) in the next five years.

“Where we are going to be spending and investing a lot is building Bluestone as a brand that people trust and people love,” added Kushwaha. Bluestone says the daily-wear jewellery segment it is going after continues to claw away at the share of the massive wedding jewellery market.

By 2018, the overall gems and jewellery market in India is expected to reach $110 billion, with daily-wear jewellery contributing $60-80 bn of the overall market.

Kushwaha says convincing of investors in this round was much easier than earlier.

“The kind of companies that got funded last year, you either had to be a food tech or hyperlocal start-up, with hundreds of delivery boys on the street. There was a certain frenzy for copycat models, now gone,” he said.

Bluestone, which reported an over two-fold revenue growth in the year that ended March 31 at Rs 250 crore, says the majority (60-65 per cent) of its business continues to comes from metros. While growth in tier-2 and tier-3 cities continues, Bluestone says it doesn’t expect demand from large cities to be overtaken in the next couple of years.

While the entry of deep-pocketed players such as Tanishq and Reliance that have a big offline presence could mean increased competition for Bluestone, the company says it is focused on delivering its services purely online. For catering to the touch-and-feel needs of customers, Bluestone says it offers home try-ons, allowing them to get a feel of the products before they buy.

“BlueStone.com has posted strong, sustained growth and set several benchmarks in the online jewellery retail industry in India, like leveraging technologies such as 3D Visual Merchanding to the omni-channel initiative of Home Try-On. We are committed to extend our association with BlueStone.com, as we see immense potential in the brand,” said Prashanth Prakash, partner at Accel Partners.

Incidentally, Ratan Tata, chairman emeritus of Tata Group, is an investor in Bluestone in his personal capacity. Tata invested in the firm in September 2014 and has gone on to back a little over 30 start-up companies since then.