Titan To Acquire Additional Stake In CaratLane At $2 Bn Valuation

SUMMARY

Once the transaction goes through, Titan’s shareholding in CaratLane will increase to 98.28% from the current 71.09%

A rough calculation pegs CaratLane at a valuation of more than INR 17,000 Cr ($2 Bn) turning the D2C jewellery brand into a unicorn

This comes nearly seven years after Titan first picked up a majority stake in the D2C brand at a valuation of nearly $69 Mn back in 2016

Tata-owned watchmaking giant Titan has signed a share purchase agreement to acquire an additional 27.18% stake in omnichannel jewellery startup Caratlane for a sum of INR 4,621 Cr.

A rough calculation pegs CaratLane at a valuation of more than INR 17,000 Cr ($2 Bn) turning the omnichannel jewellery brand into a unicorn. With this, Tata now has four unicorns in its stable, the others being BigBasket, Tata 1mg and Cultfit.

This comes nearly seven years after Titan first picked up a majority stake in the omnichannel jewellery brand at a valuation of nearly $69 Mn back in 2016.

As per regulatory disclosures filed with the BSE, Titan said it will acquire 91.9 Lakh equity shares from a ‘founder’ of the startup in an all-cash deal. Once the transaction goes through, Titan’s shareholding in CaratLane will increase to 98.28% from the current 71.09%.

As per the company, Titan will finance the deal through a combination of cash balances, internal accruals and debt. The deal is still subject to regulatory approval from the Competition Commission of India (CCI) and other closing conditions.

The watchmaker expects the deal to complete by October 31st, pursuant to all approvals. As per the company, the proposed deal did not fall under any related party transactions.

“… Looking into the future, there couldn’t be a more ideal destination for CaratLane than Titan and the esteemed Tata Group who will provide the perfect opportunities for CaratLane to continue to grow from strength to strength… I wish CaratLane and all those associated with it many more successes in times to come,” said CaratLane cofounder and managing director Mithun Sacheti.

Commenting on the announcement, Titan MD CK Venkataraman said, “… We thank Mithun Sacheti, founder and Managing Director of CaratLane, for having jointly built a customer-centric brand that all of us in Tata Group can be proud of and wish him continued success in his future endeavours.”

Founded in 2008 by Mithun Sacheti and Srinivasa Gopalan, CaratLane is an omnichannel brand that manufactures and sells jewellery items in India and the US.

The D2C brand has logged healthy growth metrics in the past three years, growing its total income from INR 723 Cr in the financial year 2020-2021 (FY21) to INR 1,267 Cr in FY22. In 2023, its total income rose more than 71% year-on-year (YoY) to INR 2,177 Cr in FY23.

This is the likely second biggest acquisition deal in the Indian ecommerce space, after Walmart acquired a 77% controlling stake in Flipkart for an estimated $16 Bn in 2018.

CaratLane competes with the likes of homegrown startups such as GIVA, BlueStone and Melorra in the jewellery space.

The big-ticket acquisition deal comes at a time when the Indian startup ecosystem is witnessing a capital drought amid adverse market conditions. As per Inc42, startup funding declined 78.5% year-on-year (YoY) to $580.18 Mn in June 2023.

CaratLane operates within the larger Indian D2C space, home to more than 50,000 digital–first brands, with the overarching sector presenting a $400 Bn market opportunity by 2030.