Bluestone Funding: Bluestone raises Rs 900 crore in pre-IPO round, to file preliminary papers this year

Jewelry retailer Copper sulphate has closed a Rs 900 crore funding round, more than doubling the capital of the company that is going public. valuation to $970 million, or Rs 8,100 crore, several people familiar with the development said.

The Accel-backed firm is now set to file the draft red herring prospectus for its initial public offering (IPO) with the securities market regulator this calendar year, after having closed the Pre-IPO round to set the benchmark, one of the people said.

Peak XV Partners, Prosus, Steadview Capital, Think Investments and Information systems Co-founder Kris Gopalakrishnan’s family investment office, Pratithi Investments, was involved in the primary and secondary share sale.

“Of the total funds “In this round, Rs 600 crore will be allocated for primary capital infusion, while the rest will be for secondary share sale,” one of the sources said. “Prosus has invested around Rs 350 crore, while Peak and Steadview have invested over Rs 200 crore each.”

Kalaari Capital, one of the early investors in the Bengaluru-based company, has raised about Rs 300 crore by selling a portion of its stake. “Yes, Kalaari has made a partial exit by selling about half of its stake,” said a person with knowledge of the matter.

ET was the first to report on Bluestone’s pre-IPO round of around $100 million. on May 29 and subsequently wrote about the details of the transaction on June 18.

According to Tracxn, Vani Kola-led Kalaari Capital held a stake of around 12.3% in Bluestone after the last funding round in September 2023. Iron Pillar, Saama Capital, RB Investments, IvyCap and InfoEdge Ventures are among other investors in the company, which hold around 20% together. Founders Gaurav Singh Kushwaha and Ganesh Krishnan hold nearly 14%.

Kushwaha and Kola declined to comment on the funding.

In a secondary stock sale, money exchanges hands between two investors and does not go into the company’s coffers, unlike what happens in a primary stock sale.

“This round was done primarily to set the pre-IPO price,” said one of the people mentioned above. “They (Bluestone) want to go public as soon as possible and have been working on the matter for the past few quarters, engaging with public market investors.”

After Titan bought out Caratlane founder Mithun Sacheti last year, omnichannel jewellery platforms have seen massive interest from investors. Silver jewellery maker Giva is raising another round, while a lab-grown diamond maker is in talks to raise seed funding from Nexus Venture Partners and Fireside Ventures, sources said. Melorra is another venture-backed startup in the space.

“Yes, there were multiple offers at different prices, but this is a significant increase in prices in about a year,” said one of Bluestone’s investors, who asked not to be named. “People are understanding the business more clearly now after the Caratlane deal,” the investor said.

This also marks another case of Peak XV making another bet on Consumer retail space after luggage manufacturer Mokobara and the fashion brand LyskraftIt is also close to investing in healthy bakery The Health Factory, ET had reported it on August 7.

Aggressive expansion

According to sources, Bluestone will use the new capital to fuel an aggressive expansion plan that is already underway. It currently has around 220 physical stores and plans to increase the number to 400 within 12 to 18 months.

“The idea is to go even deeper and expand further with more stores,” said one person familiar with the matter.

Bluestone is estimated to have closed FY24 with revenues of Rs 1,200 crore and Ebitda of Rs 3 crore, ET reported in June. “They are going to be quite profitable in terms of Ebitda this fiscal as well,” said another person with knowledge of the details.

Founded in 2011, Bluestone reported operating revenue of Rs 788 crore for FY23compared to Rs 477 crore in the previous year, and narrowed its losses to Rs 167 crore from Rs 1,268 crore. The steep loss in FY22 was due to an accounting change. In FY22, it grew by nearly 90% after a year of flat growth in FY21.

ET reported on February 15 that Bluestone is planning a Rs 2,000 crore IPO This year, Kushwaha has started engaging with commercial bankers. Kushwaha has been engaging with private and public market investors for the past few weeks.