Diamond & Emerald Exchange
Learn more about convertible campaigns.
We ethically source and supply loose gemstones and create bespoke, handmade jewellery in London's Hatton Garden. Ethical standards, trusted suppliers and breadth of choice are our values. We take great care in confirming the provenance of materials, ensuring fair trade and environmental principles are upheld.
We’ve cultivated a unique set of relationships, in particular with emerald suppliers in South America and Colombia, enabling us to offer competitive prices.
We work with both B2B and B2C markets, with an ethical lean business model designed to deliver high quality at below high street prices.
New technology allows us to operate more efficiently via digital means, with no need to hold large amounts of stock, exploiting the 'just-in-time' principle. By working to order, we avoid costly retail premises and large inventories. This 'clicks and bricks' approach enables us to offer the best of both worlds.
The mining and processing of coloured gems is a multibillion-dollar international industry. Despite the high profile, an ethical, sustainable mine-to-market supply chain for these materials is a high priority to reduce the impact on the physical environment and quality of life for labourers.
Our mission is to deliver precious gemstones and bespoke jewellery to business and retail markets in an ethical and cost effective way. We ensure the integrity of our products, from mine to retail market, with a fair trade approach.
One of our key USPs is a hybrid proposal to an often impersonal buying journey - achieved with a consultative based sales process and personalised 'click & buy'. The impact of the business model is increased choice and satisfaction.
By cultivating our working relationships, we are in in a strong position for growth. With an additional capital injection, we plan to increase revenues and employ extra staff to meet the increasing demand for ethical gemstones and jewellery.
This investment round is being raised by way of a convertible instrument.
The Key Terms are set out in the document attached to the campaign and summarised below:
• Discount – conversion at a 25% discount to the valuation set by a Trigger Event.
• Valuation cap of £1,500,000. Please note that the discount does not apply to the valuation cap.
• Shares will be issued on a Trigger Event, at the lower of: (i) the share price set by the Trigger Event less the Discount; and (ii) the valuation cap.
The Trigger Events include:
- A Qualifying Funding Round – defined as the Company raising investment capital of at least £200,000 from one transaction or a series of transactions, in exchange for the company issuing equity Shares; or
- A change of control transaction or IPO.
• The Longstop Date is 12 months from the date of the convertible agreement. If conversion has not been triggered by the Longstop Date, shares will be issued on the Longstop Date at a company valuation of £500,000.
• Shares will also be issued at an £500,000 valuation in the event of a winding up event prior to conversion.
Substantial accomplishments to date
We have developed our position in the market organically over the past 5 years, building key relationships. Some of our specific achievements and awards include the following:
1. Shortlisted in the Retail Jeweller UK Jewellery Awards, to be held in July 2019, in the category "Ethical Jewellery Business of the Year," in recognition of our work to promote ethical standards and integrity within our industry (February 2019).
2. Winner of "Jewellery & Watch Supplier of the Year" at the National Association of Jewellers (NAJ) Awards (December 2018).
3. Awarded “Best Diamonds & Emeralds Supplier 2018” at the UK Enterprise Awards.
4. Winner of “Total Business European Business awards” as recognition for demonstrating peerless accomplishments within the sector (2018).
5. Shortlisted in the "Jewellery & Watch Supplier of the Year" at the National Association of Jewellers (NAJ) Awards (December 2017).
6. Finalists in the categories of “Start-up, One to Watch” & “Entrepreneur of the Year” in the “KPMG SME Awards”.
7. We have achieved an "Excellent" Trustpilot score of 5 stars.
We minimise the amount of stock we hold and do not operate retail premises. This enables us to channel investment into marketing, advertising and PR in order to build and maintain our brand and reputation, whilst minimising overheads. Our international focus reduces the systemic risks associated with operating in a single region, mitigating some of the challenges presented by Brexit.
Our customer base includes retail and trade clients, to whom we supply loose gemstones, ready-to-wear and bespoke jewellery.
Due to our joined-up approach, we're highly flexible and adaptable, allowing us to deal with small retailers and consumers as well as larger institutions. We produce engagement rings, jewellery, accessories and bespoke jewellery, as well as fine loose stones to the B2B and B2C market.
Use of proceeds
Our main aim for this round of fundraising is to grow and expand our business, whilst raising our profile and promoting our brand, both in the UK and overseas. The capital raised will be partly channelled into expanding our sales function and developing an in-house marketing, digital marketing and advertising team. This will enable us to grow market share and develop brand recognition. In addition, it will enhance our ability to act as a broker to other businesses in our industry, seamlessly supplying them with superior goods in a highly efficient manner.
We believe it is key to the customer experience and sales performance when client facing are the ergonomics of the environment in which we interact with our customers. Consequently, we will use part of the investment to move to a new and larger sales office, affording us the ability to interact with a greater number of potential customers in surroundings that are conducive to the standards expected of our discerning clientele.
Our main target retail market encompasses the mid-to-high price range Millennial and Generation X consumers. These buyers are increasingly digitally savvy and adept at finding a good deal, especially via referrals and strong reviews on social media and review platforms, such as Trustpilot. Our leading products include bespoke engagement rings, wedding rings, bespoke and ready-to-wear jewellery, loose gems, watches, cufflinks and accessories.
We encourage our clients to visit us at our workshop in Hatton Garden, wherever possible, and we interact with more remote customers by phone, email and digital means, as well as offering full e-commerce functionality via our interactive website.
Characteristics of target market
The international jewellery and gemstone market is strong, vibrant and growing. Revenue in the Luxury Jewellery segment will amount to US$42bn in 2019 and the market is expected to increase annually by 0.04%. In global comparison, most revenue is currently generated in China (US$14bn in 2019).
The rise of the millennial consumer is starting to tip the balance towards digital channels and an increased focus upon the ethical considerations of the origins of the gems and jewellery they purchase. Our nimble, proactive approach enables us to tailor our offering to the evolving consumer markets in a way that larger brands cannot achieve.
The rising middle class in the powerhouses of Asia present large, emerging markets for fashion and luxury goods from across the globe. We already have a toe hold in this market, with a sales office in Istanbul, and we are looking to greatly expand our involvement in the Middle East and Asia Pacific in the near future by utilising digital channels.
We have focused most of our marketing and advertising through digital channels, including organic Search Engine Optimisation, Google Ads, social media engagement and banner adverts. We are also planning radio and TV campaigns and advertising on the London Underground. We have sponsored high profile golf clubs and we are running adverts in magazines including Tatler.
Currently, we outsource most of our marketing to an agency but plan to employ some of the funding from this campaign to grow an in-house team to maximise the reach of our marketing activities. They will work closely with our salespeople to ensure a closely linked strategy.
In terms of PR, we’ve had several editorial interviews and articles published so far. Looking ahead, we aim to expand this area of ‘earned’ media as a cost effective and impactful means of increasing brand awareness.
We operate in a well-established and competitive market. We have unique selling points that differentiate us from some of our rivals with similar business models, including: Leibish; 77 Diamonds; Blue Nile; Taylor & Hart and James Allen.
We distinguish ourselves from these businesses in several ways; our main focus being upon the ethical standards and integrity of our business. This means we take great care in confirming the provenance of the materials and gemstones we use, ensuring fair trade and environmental principles and standards are maintained.
We have a unique set of relationships with South American emerald producers and suppliers and a European exclusivity agreement with one of the principle emerald dealers in Columbia. This allows us to offer one of the widest ranges of products and services in our industry. As a result, our consumers are provided an unrivalled level of choice, along with price guarantees and a deeply personal buying journey from start to finish.