Diamond & Emerald Exchange

Idea

Introduction

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.

Intended impact

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.

Convertible Terms

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.

Monetisation strategy

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.