Blockchain startup Diamond Standard, the producer of the world’s only regulator-approved diamond commodities, has netted $30 million in funding. The investment round was co-led by Left Lane Capital that closed $1.4B in an oversubscribed round and Horizon Kinetics alongside additional participants in the round include Gaingels and Republic.co.
Distribution of tokenised diamonds
Diamond Standard will use the investment to expand the production capacity and accelerate distribution of tokenised diamonds.
The raise comes on the heels of the successful launch of the Diamond Standard Fund. This fund enables investors to allocate to a new asset class – diamonds through convenient shares instead of owning physical diamonds.
“Following 20% returns last year, the Diamond Standard Coin has continued to generate a positive return this year, while the S&P 500 is down 14% and bitcoin is down 50%. Investors need a new uncorrelated asset class, and this capital will enable us to increase capacity and expand our offerings,” said Cormac Kinney, Founder and CEO of Diamond Standard.
“The Diamond Standard offerings are a perfect fit for the contrarian, innovation, value and inflation protection goals of Horizon Kinetics and like-minded investors,” said Murray Stahl, Co-Founder & CEO of Horizon Kinetics.
“While many investors and startups over-indexed towards digital-backed assets, we got excited by real-asset backed stores of long-term value. Investors have typically held about 20% of market value for a given commodity. Diamonds have withstood the test of time, and thanks to Diamond Standard, investors finally have access to the asset class in a convenient, safe and trusted manner,” said Jason Fiedler, Managing Partner of Left Lane Capital.
Alternative investment option for everyone
The diamond industry has struggled to attract investors, despite the allure for jewelry, due to the lack of a uniform system for standardising the value of the precious gem.
Founded by Cormac Kinney in 2018 in New York, Diamond Standard aims to change that by making Ethereum-based tokens that are backed by physical diamonds. These are standardised and tradeable on several exchanges.
Diamond Standard is licensed to issue, sell and redeem tokens and digital assets. It provides both retail and institutional investors with a diamond-backed digital currency. The physical coins stored in a vault can hold eight to nine standardised diamonds. The diamond-embedded tokens are digitised through an Ethereum-based digital coin, bitcarbon, which is tradeable on different exchanges.
The blockchain startup views the new asset class (diamonds) as an alternative investment for anyone in the high inflation market environment.