Life after CaratLane: Mithun Sacheti wants to help build businesses
Titan will buy out the CaratLane founder’s stake in the company. Post exit, Mithun Sacheti wants to become an enabler for other entrepreneurs.
- Titan will acquire his 27.18% stake in CaratLane for Rs 4,621 crore. With this, Titan becomes its majority shareholder.
- Post exit, Mithun wants to use his resources and skills to help entrepreneurs build sustainable businesses.
- Mithun understands the consumer business space and is keen to explore related opportunities.
Gold is a metal that has always been important to Indians. It’s not just about investment and returns, it has cultural significance. But with the ever-fluctuating prices, it isn’t always affordable. Not for those who’ve just started their careers, at least. It is usually the older demographic that gravitates towards it. It was this approach towards jewellery that Mithun Sacheti wanted to change when he foundedin 2008.
Mithun came from a family of jewellers. His father Padam Sacheti set up Jaipur Gems in the 1970s in Mumbai. Mithun could have easily walked in his father’s footsteps, but he wanted to do something different. He took the learnings, the tricks of the trade his father taught him, and put them into practice by creating CaratLane.
“When I set out to establish CaratLane, everyone advised me against it. They asked me ‘Why are you doing this when you are a celebrated jeweller already?’,” Mithun Sacheti, founder, CaratLane, shares in a Conversation with Shradha Sharma
CaratLane caught the attention of the Tata Group after eight years of hard work and trying to perfect his product-market fit. Titan, which made its first investment in the company in 2016, has now signed a deal to buy out Mithun Sacheti’s 27.18% stake in CaratLane for Rs 4,621 crore. This made it one of the largest exits for a founder in the past five years. Sachin and Binny Bansal’s exit to Walmart is probably the only one that is bigger. Irrespective of the others, this as an important milestone for India’s startup ecosystem, it tells founders that there is a path to creating legacy and for investors another reason to double down on India.
The deal has led to tremendous euphoria. But for Mithun, it is business as usual.
“The outcome (of the deal) didn’t feel so crazy as did the love and adulation,” says Mithun. Honing the craft
In 2000, Mithun was handed over the responsibility of building Jaipur Gems’ presence in Chennai. He did that successfully and also launched a showroom in Coimbatore. However, this journey gave him an epiphany.
Back then, high-end jewellery brands such as Jaipur Gems had a smaller, more focussed customer base. People purchased expensive gold jewellery for weddings, often spending lakhs on each jewellery set, which would ultimately end up stored away in lockers after they were used. Using accessibility, affordability, and usability, Mithun wanted to change the equation of buyers with jewellery.
“From an era of the mother selecting jewellery for their daughters, my idea was to build a business where the daughter buys it herself. And the price point of about Rs 25,000 for diamond jewellery was my strategy,” he adds.
CaratLane was launched when India was just beginning its e-commerce journey. People were slowly beginning to trust products bought from a website. Very few were prepared to make a large ticket purchase like diamond jewellery online.
But the affordable price point turned out to be a game changer. However, Mithun still considers the first four years (2008-2011) to be the most challenging. He not only had to get new customers but also ensure that they became repeat customers. The family business taught him the importance of loyalty.
“We understand the importance of repeat customers and that’s why CaratLane gets 25% of repeat customers. The bite-sized price point works well,” he explains.
Perhaps, amidst these challenging times, what kept Mithun going was his love for the craft. His sheer conviction and passion have helped the business overcome turbulent times. The testament to his success is that a vertical commerce company such as CaratLane scaled quickly in a short duration. In FY23, CaratLane clocked Rs 2,177 crore in revenue, a 72% increase over the previous year.
Walking the Tata bridge
By 2011, Mithun was eager to raise capital for CaratLane. Tiger Global entered at the right moment and handed over a $6 million cheque (~Rs 27 crore at 2011 exchange rates).
Mithun calls it serendipity. “Lee Fixel of Tiger Global reached out to us and then we spoke to him. And an hour later, we had the term sheet,” he adds.
Tiger Global continued to stay invested in the company, investing in a few more rounds. The Tata Group came into the picture in 2016 when online retail witnessed a tremendous surge.
“The Tatas liked the team, the business, and the frugality with which we were building,” says Mithun. A few rounds of negotiations later, Titan acquired Tiger Global’s stake in CaratLane. That marked the next phase of organisational expansion for Mithun.
Even as marquee names were ready to back CaratLane, Mithun also admits to making a few mistakes. He talks about comparing his company with e-commerce majors such as Myntra and Flipkart.
But you can’t really blame Mithun for it. He entered the online jewellery business when mass digitisation mostly existed in theory. Like other entrepreneurs, he has also had moments when he had self-doubt, when he wondered if things were going as per plan.
“There's no doubt there were doubts. But luckily, the fear didn't take hold of the doubt,” says Mithun. And stresses on the value of timing. “It is the most important thing, the one thing that you must get right.”
Life beyond CaratLane
When news broke about Mithun’s exit, the market celebrated. The big story was CaratLane’s Rs 17,000 crore valuation. Suddenly, Mithun became a new poster boy for startup exits.
“Finally, Mithun will mean more than Disco Dancer,” he says with a chuckle.
But leaving the company you built is difficult. And it hasn’t been easy on him. “I would much rather keep the business than get the cash,” he says solemnly. “But from a strategic point of view, I understand our journeys had to diverge,” Mithun adds.
The stock market appreciated the deal as well. Titan’s stock price stayed neutral, which meant that CaratLane was neither undervalued nor overvalued.
So, what does he plan to do with all this cash?
“Money is just a score in life. Deployment is a bigger challenge for me, he says and talks about his ambitions of becoming an enabler, a mentor to other founders. “I look forward to working with partners who are interested in learning from my skill sets of compounding,” explains Mithun.
But what about CaratLane, I wanted to know. Will this be his final goodbye? “I won't be involved in the business, but I will always be available for the business,” he shares earnestly.
For now, he is eager to build bigger businesses, trusted businesses. He is raring to go once again. I don’t think Mithun is done. Not by any stretch of the imagination.