Introduction: A Dream Takes Shape
In a quiet Mumbai office in 2008, Mithun Sacheti dreamed of revolutionizing the way Indians buy jewellery. Armed with Rs 1 crore in seed funding and an ambitious vision, the young entrepreneur embarked on a journey that would transform both his life and India’s jewellery landscape forever.
Early Days: Spotting the Online Opportunity
Sacheti, then in his early 30s, came from a family of jewellers. He had gained valuable experience working at their well-established store, Jaipur Gems. But Sacheti saw a huge untapped opportunity in the nascent Indian e-commerce space. “Looking at the increasing time people were spending online, I realized the internet was going to be the place where a lot more commerce would happen in the future,” he recalls. Along with co-founder Srinivasa Gopalan, Sacheti started CaratLane – India’s first online jewellery retailer.
Teething Troubles: Skepticism and Setbacks
The early days were challenging to say the least. The website saw barely any sales in the first few weeks. Attending trade events brought more skepticism than encouragement from established jewellers. “Who will buy jewellery online?” many scoffed. Even opening physical outlets backfired initially. Women thronged their digital showroom in Delhi, only to leave disappointed by the lack of physical jewellery to see and touch.
Pivoting to Success: The Omnichannel Approach
Undeterred, the CaratLane team kept experimenting and iterating on their model. They tried a ‘try-at-home’ service which showed promise but wasn’t scalable. Pop-up stores brought mixed results. Slowly but surely, they zeroed in on a winning formula – an omnichannel approach allowing customers to discover designs online and then visit a store for the final purchase.
Funding and Acquisition: A Bittersweet Moment
A pivotal moment arrived in 2011 when Tiger Global’s Lee Fixel invested $6 million for a 33% stake. The funding fueled CaratLane’s growth but Sacheti soon realized losses were mounting. In 2016, at a valuation of $69 million, Titan acquired a majority 62% stake from Tiger Global. It was a bittersweet moment – CaratLane now had the backing of Tata Group but some felt the exit price undervalued the startup’s true potential.
Lessons from a Legend: Jhunjhunwala’s Advice
Seeking guidance, Sacheti met with legendary investor Rakesh Jhunjhunwala in 2017. In a surreal interaction, Jhunjhunwala imparted some sage advice – focus on profitable growth and always take the long-term view. “He taught me the power of compounding, the value of positive cash flow, and the importance of staying invested for the long haul,” says Sacheti.
The Road to Profitability: Discipline and Expansion
Taking those words to heart, Sacheti bought out his co-founder, doubled down on the business and vowed to make CaratLane profitable. Stores expanded gradually, from 20 to 80 per year, funded by improving cash flows rather than burning venture capital. The financial discipline paid off. CaratLane turned profitable in FY21 and hasn’t looked back since.
A Landmark Exit: Valuation Soars 25X
From Rs 140 crore in revenues when Titan first invested, CaratLane closed FY23 at an impressive Rs 2,177 crore. Now with over 200 stores across India, the brand has truly gone from clicks to bricks. In August 2023, in a landmark deal, Titan bought Sacheti’s residual 27% stake for Rs 4,621 crore, valuing CaratLane at a whopping Rs 17,000 crore – a 25X jump from the 2016 valuation.
Timeline of key events:
- 2008 – CaratLane founded with Rs 1 Cr seed capital
- 2011 – Tiger Global invests $6M for 33% stake
- 2014 – Launches successful omnichannel model
- 2016 – Titan acquires 62% stake at $69M valuation
- 2019 – Raises Rs 99 Cr from Titan at $130M valuation
- 2021 – Turns profitable
- 2023 – Titan buys Sacheti’s stake for Rs 4621 Cr, valuing CaratLane at Rs 17,000 Cr
Lessons for Entrepreneurs: Dream Big, Start Small
From starting as a four-member team in a small office to leading a 3,000+ employee organization, Mithun Sacheti’s entrepreneurial journey with CaratLane holds valuable lessons. Persist through early setbacks, constantly experiment, find a sustainable business model and maintain financial discipline through the ups and downs. As Sacheti puts it, “If you solve for the business fundamentals and customer needs, the money will follow.” And crucially, dream big but be willing to start small. Because sometimes, it’s the little ideas that end up making the biggest impact.
