Silicon Valley-based Diamond Foundry has been valued at $1.8 billion (€1.49 billion), following a $200 million investment by Fidelity, which the lab-grown diamond startup will utilise to boost output and compete with major gemstone mining rivals like De Beers.
Source: Diamond Foundry
Source: Diamond Foundry
The company, which counts Leonardo DiCaprio among its backers, is disrupting the traditional diamond sector by making chemically identical stones that avoid the myriad problems associated with the business.
The investment will help Diamond Foundry move forward with its aim of quintupling production at its factory in Washington state to up to 5 million carats annually by the end of 2022 - equivalent to around 25% of De Beer's production.
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"This is the first time that this quality of diamond is produced at mining scale," CEO Martin Roscheisen told the FT, adding that the company was considering opening a second factory, potentially overseas.
The company, which is targeting the high-end jewellery market, is also developing diamond wafers for use in the semiconductor industry.
In the past four years, Diamond Foundry has doubled its production. During the same time period, global production of mined diamonds has fallen since peaking at 152 million carats in 2017. Last year, the disruption brought on by the pandemic meant production slid by 20% to 111 million carats.
Since no new diamond mines are coming into production, the market is "now at that inflection point", said Roscheisen.
Diamond Foundry claims it is selling its lab-grown diamonds at higher prices than some natural stones at an average price of $282 per rough carat.
Generally, lab-grown gemstones sell at significantly discounted prices to natural ones. According to data from diamond market analyst Paul Zimnisky, a half-carat lab-grown stone sells for around $615 compared with $1395 for a mined diamond.
The company is also planning to spend some of the $200 million on honing its production techniques for 200 mm single-crystal diamond wafers to be used in semiconductors.
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Using diamonds instead of silicon in semiconductors helps increase their performance due to their ability to conduct heat. Data centres will likely be among the first companies to use the diamond-wafer chips, though in the future they could be utilised in 5G tech and electric vehicles, Roscheisen said.
"All the largest technology companies in the world are looking at doing diamond wafers," he told FT. "It’s quite difficult to have full diamond for chips . . . we haven’t completely solved it yet."
Since its launch in 2012, Diamond Foundry has raised $315 million (€261 million) and has no debt.
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