How big could be the business of a company that offers engagement and wedding rings online and how is that innovation? Well, it appears it both could be a business generating €4M revenues with a team of 30 and one interesting enough for Techstars Boston accelerator. Taylor&Hart, partly inspired by the jewelry fashion icon Elizabeth Taylor, is a startup founded in 2013 and based between Sofia and London, specialized in diamond engagement rings. Its innovation lies in the unique way the rings are designed – by the customers themselves and online. The potential of the premium jewelry attracted the VCs’ attention and the company just announced it has raised £1M seed funding to expand.
“We are in a pretty untapped niche of the close to $100B diamond jewelry market right now. Custom engagement and wedding rings are also a hot topic and the data shows it will only grow in the years to come, especially in the U.S”, Nikolay Piriankov, co-founder and CEO of Taylor&Hart, told Trending Topics.
According to QY Research, the market will reach $96B in 2025. It’s a tough market as there are 10K design and production businesses and 35% of the market is dominated by big retailers as a Bain&Company report shows. Digital technologies, on the other hand, are one way for smaller players to find their place on the market. The acquisition of the online jewelry retailer Blue Nile back in 2016 for $500M is an evidence that new business models are interesting.
The name that might change the game
It all started many years ago in South Africa where the born in Bulgaria Piriankov grew up. At the age of 17, he got a job as sales representative in a diamond store tailored for Chinese customers. That was the time when he developed the interest for diamonds. As Piriankov finished high school and headed to the U.K. to study digital marketing, his childhood friend and partner in several teenage entrepreneurial experiments David Sutton took his place in the store. Some years later Piriankov and Sutton reunited to this time start a real venture. That’s how the brand Rare Pink, after the name of a very expensive type of diamonds, was born.
The co-founders wanted to offer their clients very personal jewelry and very personal custom care. And their target was the premium segment. That was clear from the very beginning and that attracted the Bulgarian fund Launchub that invested €200K in the company in 2015.
What was not as clear, however, was that this type of diamonds are extremely expensive and that the brand name sounded weird to the market. “One of the first things we got to hear was that our brand name was not appealing. Of course, we had a lot of other issues to resolve, but the new brand concept was a real puzzler”, Piriankov recalls.
After Techstars the company got a new identity as Taylor&Hart which led to 30% sales increase, but also lost a co-founder due to cultural fit issues. Soon after that, the startup started to grow in sales and revenues, and also developed an advanced marketing team in Bulgaria. In 2017, the company managed to generate €2M revenues and that will grow more than double this year. Piriankov expects to end up 2018 with a turnover of €4.4M. This figures logically attracted more investors’ attention and in September 2018, the company closed a seed round of £1M led by Launchub. The London based Garage Soho, an early stage investor and brand builder, has also supported the company in the current round.
“There were two things that got our attention immediately – on one hand that was the market potential and on the other, and more important Nick’s spirit. He is one of the best founders I know, possessing all the needed traits – endurance, very quick learning curve and leadership. As for the market, we usually invest in ‘end-consumer products’ if they have the potential to dominate a specific niche”, Stanislav Sirakov, partner at Launchub, told Trending Topics.
From online to physical
So far, Taylor&Hart was pretty much a digital business – a platform where customers look for inspiration and get in touch with the team of rings consultants. The communication would than move to another digital channel, where the couple would discuss anything together with the designer and see 3D designs of the ring. A fun fact is that engagement rings make up 80% of the company’s sales and the future brides actively participate in the design process. “That is an interesting trend. Nowadays couples are together for years and it’s a logical step for women to participate in the design of their engagement rings. Especially if they cost as much”, Piriankov explained. The price of a Tylor&Hart ring might vary between £1.5K and £50K, depending on the size of the diamond (80% of the rings) or the precious stone, and the average is around £4K.
In the first years, the only offline part of the business has been the production, which was handcrafted by the company’s partner ateliers. However, following the trends on the premium jewelry market and the big players on it, Piriankov decided it’s time for physical consultancy and showrooms. The first one was opened in London and another one will be launched in New York this November. Its establishment is part of the reason the company was fundraising over the last year.
The U.S. is also the next target market for the company. Currently 65% of the clients come from the U.K. and 30% from the U.S. “Today they are onto their path to be a market leader in the UK, which is a £50M+ business, and if they manage to crack the U.S. market that will increase exponentially”, Sirakov said.