From losing everything to $2B valuation!

Hey there,

From 12 years of heavy losses to a $2B+ valuation, Mithun Sacheti turned Caratlane into one of India's greatest startup turnarounds.

Read and get inspired 👇

Mithun, born into a family of jewelers, craved the excitement and pace of new-age startups and chose a different path. His gemology studies in the U.S. coincided with an immersion in the dynamic startup scene there, which led him to start Caratlane.

His bold move paid off when he sold his company to Titan last year, valuing his stake at over ₹4000+ Cr and the company at around ₹20,000+ Cr.

Here's how he made it happen:

1/ Leveraging jewelry expertise and early mover advantage:

Mithun's family jewelry background and gemology education made him uniquely positioned to disrupt the market. He pioneered online jewelry retail in India when investors and businesses dismissed the idea as impossible.

But Mithun persevered through the naysayers, and the rest is history.

2/ Staying invested in your business:

During periods of distress, Mithun gave over 60% equity to Tiger Global for $50 Mn over multiple rounds and years. Despite 8 years of losses, Tiger exited in 2016 selling its stake to Titan for the same $50 Mn.

But advice from Rakesh Jhunjhunwala stayed with Mithun - "Even if you must borrow, stay invested in your own company." So when his co-founder exited, Mithun bought those shares, owning 27%. This later sold for ₹4,261 crores in Titan's acquisition.

3/ Focusing on diamonds over commodity gold:

Gold prices were fixed and publicly known, leaving very little margin for jewelers to make money. But diamonds did not have this same price transparency. Diamond pricing allowed more flexibility and margins for retailers.

Additionally, at that time Indian youth were looking to purchase jewelry that was more modern, unique, and affordable compared to traditional gold jewelry. Caratlane catered perfectly to these changing preferences with its focus on diamond jewelry.

4/ Adapting to Indian fondness for in-person shopping:

For the longest time, Caratlane remained a digital-first company, keeping costs low by selling jewelry only online. But over time, Mithun and the team realized that Indians still love to see, touch, and feel jewelry in person before making buying decisions.

So Caratlane adapted by expanding into offline retail as well, opening its first physical store in Delhi's GK2. From that first location, Caratlane has expanded rapidly to now having more than 220+ stores located across 88 cities and towns in India - while still retaining its digital-first DNA.

5/ Titan acquisition provided a lifeline:

Titan Company's acquisition of Caratlane provided a much-needed lifeline for the company during a period of heavy losses and a cash crunch. The acquisition brought in capital to continue growing.

But equally importantly, becoming part of the Tata group provided Caratlane with the gravitas and trust of the highly respected Tata and Titan brands. This patronage gave additional credibility to Caratlane's offerings in the minds of Indian consumers.

From 12 years in heavy losses to a point where founders didn't have a penny to spend to now having a run rate to cross ₹3000+ Cr in revenue this year, Caratlane’s story has to be the biggest startup turnaround in the Indian startup ecosystem. Also, the second-largest cash exit for any founder after Flipkart’s founders.

Can other cash-crunched startups like Dunzo which is backed by Reliance, do similar things and become the best of their industries in the coming 5-7 years? Only time will tell!

✏️ Jargon of the day

Acqui-hire

An acqui-hire in startups is when a big company buys a smaller company mainly to hire its team. Instead of just wanting their product or service, the big company is interested in the skills and expertise of the small company's employees.

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