Scio Diamond Technology Corporation today announced it has closed $2.5 million in growth funding from Heritage Gemstone Investors (HGI) to double production of its lab-grown diamonds and refinance debt, said in the press release received by Rapaport. In addition, the two companies agreed on terms for a second phase of funding from HGI that will take place in 2015.
The funding from HGI will be used to refinance a $1.5 million loan from Platinum Capital Partners at more favorable terms. The doubling of capacity will come from the purchase of additional production platforms in a larger size.
“Scio Diamond has been a pioneer in developing the technology behind the success in lab-grown diamonds. We believe the company is well-positioned to be a major factor in expanding the market for lab-grown diamonds,” - HGI noted.
Gerald McGuire, the president of Scio Diamond, said, “Our growth strategy is designed to take advantage of both near term and future market opportunities that we believe will make Scio Diamond the leader in lab-grown diamonds. Our investors and board members believe strongly that lab-grown diamonds are a promising growth market."
Lab-grown diamonds, with identical properties as mined diamonds, are a growing portion of the gem trade. In the market assessment of grown diamonds, Frost & Sullivan pointed out that “change in consumer preferences tending towards environmentally and socially responsible products is a key driver for the acceptance of grown diamonds.”
Moreover, Bain & Company’s 2014 report on the global diamond industry noted that “diamond demand is expected to outpace future supply.” These developments could accelerate demand for grown diamonds.
In its fiscal year ending on March 31, 2014, Scio Diamond increased net revenue by more than $500,000 over 2013. The company reduced operating expenses from $8.1 million to $5.6 million from 2013 to 2014.
Scio Diamond employs a patent-protected chemical vapor deposition process to produce high-quality, single-crystal colorless, near colorless and fancy colored diamonds for the jewelry market in a controlled laboratory setting. Scio also delivers diamond materials for advanced industrial, medical and semiconductor applications.
Theodor Lisovoy, Rough&Polished, Moscow
