Episode 206 / February 27, 2023

The Journey of CaratLane: Challenges, Growth, and the Acquisition by Titan with Founder Mithun Sacheti

51 min

Episode 206 / February 27, 2023

The Journey of CaratLane: Challenges, Growth, and the Acquisition by Titan with Founder Mithun Sacheti

51 min
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In this episode, we talk with Mithun Sacheti, the founder of CaratLane, who has disrupted the traditional jewellery industry in India by leveraging technology and innovation. He started CaratLane in 2008 with the vision to provide access to beautiful jewellery designs at an affordable price.

Mithun Sacheti comes from a Marwari family and joined the family jewellery business, Jaipur Gems, after graduation. He started its stores in Chennai. Later, he founded Caratlane in 2008 after being inspired by the online jewellery retailer, Blue Nile. Caratlane aims to solve the problem of limited access to beautiful and affordable jewellery designs for the middle class in India.

The conversation dives into his entrepreneurial journey, his insights on the Indian D2C startup ecosystem, and the challenges he faced along the way. Mithun recalls the struggles he had in convincing Bluedart to be their shipping partner and how it took them almost a year and a crore to build their website.

Tune in now to know Mithun’s journey of building Caratlane from scratch, his belief that in life, the harder thing is not to find answers but to find the right questions and what are the next questions for him in life.

Notes –

00:00 – Highlights of the conversation

01:45 – The idea & Need of Caratlane

01:55 – Disrupting the underserved jewellery market in India

03:19 – The first one to bring jewellery at low prices

03:33 – The designs should be democratised

03:55 – Becoming the Market Maker

04:04 – The reality of the Jewellery Market in India

06:08 – Why 25% of your wealth should be in form of gold?

06:47 – The effect of Ukraine War on purchase of gold

07:05 – Quitting family business to start Caratlane

08:30 – Life of kids born in families running big businesses

08:58 – Inspiration behind starting Caratlane

10:36 – First few pivots in their product journey

13:38 – Initial phase of building and growing Caratlane

17:57 – Raising funding & building for Titan

21:57 – Journey after Tiger Global’s funding

24:12 – Getting advice from Raamdeo Agrawal at Rakesh Jhunjhunwala’s dinner

31:48 – Why do people really buy jewellery?

39:13 – Tata group being able to marry the Entrepreneur to the business post-acquisition

43:03 – Learnings while working with Tata

46:15 – What are the next questions in life for him?


Read the transcript Here:

Mithun 0:00  

The whole aim in a VC journey in the first part of it definitely is to figure out what’s the right business model. And we realize the power of the internet at that point that you could in the Whitefield area, build so much traffic digitally, that by the time the moment of truth comes, when you open the store, everybody’s flocking in to buy. And then seeing a lot more people, more people come by and want to see what the hell is going on over here. And that’s how we really became successful. And what it taught us a lot is that efficiency matters a lot. And if you think about it, that’s a 2 billion business, it’s been created in the last 14 years with a  total capital of 400 crores. So that’s a very good efficient business model. 


So we literally have done Customer Lifecycle Management and build this catalog, which goes all the way through learning from the SaaS companies, because we sit in Chennai the SaaS capital of India, while everybody else has a one or two year horizon, I have a big strategic advantage, because I keep everything with a minimum seven year horizon. And when it is a seven year horizon, time becomes the biggest ally. And I think TATA’s have that as well. So think about Netflix, when people say no for a movie, it’s far more insightful than when people give a thumbs up for a movie on that, and they put a lot more value to it. And if you take that to real life, and think about it, people should learn to help other people by saying no to them, because in the long run, they all have to believe that that guy also has only one life.


I will work on helping Tanishq guys to do better service. But don’t make me say things or don’t say things which will make me lose my job.


Siddhartha 1:45  

Hi, this is Siddhartha Ahluwalia. Welcome to the 100x Entrepreneur Podcast. Today I have with me Mithun, founder of Caratlane. Mithun welcome to the podcast.


Mithun 1:52  

Thank you so much Siddhartha. And thank you for having me here. 


Siddhartha 1:55  

So Caratlane is such a loved brand across India. You disrupted the jewelry market by building great designs, more affordable jewelry. And I think you also rethought how earlier people think that jewelry is expensive. It starts from a certain range, but you brought it down for the middle class. How do you do it?


Mithun 2:18  

In my life,there are certain words I struggle with: hate, disrupt, all of this. I don’t think we really disrupted it. I think there was a hungry market out there. 


Siddhartha 2:27



Mithun 2:27

Underserved market out there. And if you think about the mean income of an Indian, and you think about how many people are buying jewelry at the current price point, you realize that there are a lot of people who are either underserved or unserved, both. And that is the opportunity that I think, as we build the business we learnt more about, and we sort of went after. Luckily,  I’m in an industry where a lot of people don’t like change too much. And so they didn’t react fast enough. And we got a big runway to sort of go and build this category out.


Siddhartha  3:02  

I think you were the first to bring the 18 karat across the industry. Earlier, it used to be 22, 24.


Mithun 3:08  

No, I wouldn’t say that, there were enough people doing it.


Siddhartha 3:11

But not at scale.


Mithun 3:12

But, maybe I think what we were at first for sure is that we introduced designs at a price point where people didn’t consider creating design, there was a Hindi saying “itne mein itna hi”. That used to be the philosophy when people wanted to buy a 20,000 rupee piece of jewelry. And I believe first that design must be democratized. Whatever you buy must have a thought behind it, must have design behind it, must have usability behind it. All this must be thought through. And you got to solve for all of this as well. And I think that platform is stuck to and sort of built the business out. 


So if you see our biggest contribution, maybe to the jewelry businesses, is that we’ve been market makers, more than people who are going after market share on that part. And I think market share guys are a bit more disruptors. market makers, I feel are cooler than that.


Siddhartha 4:02  

Okay. So Mithun, let’s step back and can you describe the jewelry market of India in all its glory?


Mithun 4:09  

Sure, Let’s divide the jewelry market into certain sections. The largest piece of the jewelry market is the plain gold jewelry business. That’s an area which is the largest piece and we frankly don’t even exist in it yet. This is where people for years have invested in gold. They haven’t looked at adornments alone. You can say 70% of the thought processes is of investment and 30% of the thought process is of adornment in that. You think about the next phase which is  the traditional arts of India, which is in Jaipuri we’ve Jadau, in the South we’ve Temple jewelry, and so and so forth in all other parts of India, that possibly is another 25% of the market. And that 25% of the market is very ethnic. 


Indians love to wear from different parts of the world and that’s why that market keeps growing and we all enjoy that. The third part of this business is the diamond jewelry market. That market is just about 50 years old, and possibly the fastest growing piece in this. It also has great value addition for everybody. And if you think that society is modernizing, you’d see a lot more people wanting to wear diamond jewelry as well because our clothing is so westernized now, as compared to where we used to be before. And we are at the end of the day, jewelry and accessories that complement what you wear. In the diamond jewelry piece, you can say, now you’ve reached at about a 50% investment, 50% adornment sort of value proposition on that. And if you take all of India, and I’m not getting into Fine Jewellery and fashion jewelry and all of that, but if you take all of India, we make up about two to two and a half percent of this country’s GDP, which is a very large part.


Siddhartha 5:41

And that would mean what number in crores?


Mithun 5:43

Four and a half, five lakh crores is the base estimate on something like that. In our economy, that’s a very large number, the beauty of this country and I’ll give you a stat of this two, two and a half percent of GDP for the rest of the world, the global average is 0.3 to 0.5. So we are 5x to 8x of this number. And there’s a beautiful story behind it as to why we are the way we are as well also.


If you read Chanakya Neeti, ever, and a friend of mine made me do that once. Chanakya said beautifully, where he said 25% of your wealth must be in the form of gold. Because you don’t know when you would have to run, that’s your bet against your own government and see how it plays out. You had kingdoms back then, you don’t know one kingdom gets overthrown by another kingdom. And then all those people who are from one religion or one area have to run to somewhere else. You can’t run with the land, you have to run with your gold at that point.


The second piece that happens is, look at Ukraine right now. What could people have left with? And I think that’s created one big jump as well in gold consumption across. If you see pre Ukraine war prices of gold, as well as other commodities and now, you’d see that is the only one that’s gone up, everything else has possibly stagnated or gone down in itself. So I think there’s a lot of value to the Indian philosophy of doing this. And that’s why we’re at two and a half percent of GDP.


Siddhartha 7:05  

And when you started caratlane, you come from a business background which has been in Jewelry. So which part of India do you originally belong to?


Mithun 7:14  

Well, originally, I’ve never lived there but I belong to Rajasthan. I grew up in Bombay. And yes, my formative years were, when you’re basically a graduate, B.Com, in some sense, in that part of time, at least, we felt we were uneducated, and there was not much that I had interest in and my parents ran a jewelry business. And it was daunting to get into but I at least had that safety net. And I got into it, and over a period of time, I just fell in love with it.


Siddhartha 7:42  

So your parents had a jewelry store?


 Mithun 7:44  

Yes. It was in Bombay by the name of Jaipur gems. And my brother and I are the products of, whatever we understand about jewelry, we’ve got a lot of formal training, but most of it is thanks to our mother. So we’re, in many ways, products of excellent apprenticeship with my mom.


Siddhartha  8:02  

And from which year to which year, you were a part of the family business?


Mithun  8:06  

So I’m the second child in a Marwari family, and that is a 100%, disguised unemployed kid. So I moved to Chennai in 2000, just after my graduation. And just after my graduation after my professional studies in gemology and jewelry manufacturing. Because of my one month spent in Bombay, I realized this and you know Marwari parents are young. So imagine mom and dad at 45-46 working in the store. Brother older than me, has joined the business. It was like a matinee show. I was basically going there to carry lunch, and then come back. And I realized there was not much value addition that I’m going to do to this whole thing. So I said, Look, I’m gonna go somewhere else, and build a store out. So I moved to Chennai. And I built my parents business extension in Chennai in 2000 to about 2008, I was doing that.


Siddhartha 8:57  

And what insight that you started with caratlane, because you were in the traditional jewelry business?


Mithun  9:03  

There was a beautiful business called Blue Nile that I really enjoyed watching in America. I had some interaction over there, because to earn some pocket money, I used to do some brokerage and my business, not my business really, but my activity over there was getting disrupted by this business. And I felt that there was an opportunity of marrying the internet, from a marketing standpoint, to the merchandise that we want to sell. And that insight is really what we carried through and sort of built it. But  when you’re in your late 20s, as F. Scott Fitzgerald says beautifully. You look at the world from top of a mountain, every opportunity is a Rolling Stone. And now in my 40s, I sit in a cave and want to protect what we’ve built. When I was in my 20s Didn’t think so much. Just thought that this is a great opportunity. I should go and build that part.


Siddhartha  9:47  

So you were one of the first rights when Flipkart was getting built? You were building an e-commerce Store for Jewelry.


Mithun  9:55  

Imagine if I really did think, would I have done this?


Siddhartha  9:59  

So 2008 is when you started Caratlane.


Mithun  10:03  

2008 October 13-15, somewhere on that date.


Nansi  10:06  

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Siddhartha 10:36  

What were the first few pivots that you had to make? The first few journeys, the product journey.


Mithun  10:42  

So it took us way too long to build a website. And I came from a traditional family. And so to convince everybody that I’m running a really successful jewelry business in Chennai, it was really successful back then. So imagine in 2008, to have a 80 Crore business while making 10 crores of profit. And to say that, no, I want to go and build something else. And nobody else here as a family member, so I’m going to professionalize that I’m going to build another business and do that. And you can imagine the reaction of that in a Marwari family, not too great. 


So I had to convince my family to give me four years of my life. And let’s agree on a bunch of money as a stop loss. So time and money became a stop loss. We agreed on that. And with that philosophy of four years and 75 lakhs of investment, we agreed to sort of go out and build this business. That was the deal I made with my family. So that’s just really how it all started. That was my first big battle. And I still think oftentimes, we undervalue the role of family, because we over-value our own role. But my family put the stop loss parameters around me through a great conversation. And I’ll always be grateful for that.


Siddhartha 11:53  

Back then there was absolutely no internet in India, I think only 1000s or lakhs of people would have access to broadband in 2008.


Mithun  12:02  

It just shows how young you are. But no, there were lakhs of people who had it. They were not in the 1000s. There was broadband. That was there everywhere, it was not a dial up. So no, it wasn’t difficult, basically to find people on the internet, but there was no ecommerce really happening. Transactions were a challenge. And that’s going to be a problem.


Siddhartha  12:23  

And Yahoo was the main mail as well as the chat medium.


Mithun  12:27  

Gmail had begun significantly by then. I don’t think Yahoo was still the main thing. But Yahoo was prominent, at least at that point, Hotmail was still around. And we would speak about that as well. Bing wasn’t there. Indians were really not onto Facebook, There was also Orkut. There was an ICQ messenger, there are all these kinds of things, which the world doesn’t even see anymore, also.


Siddhartha 12:48  

And you were just touching your 30s.


Mithun  12:50  

I was just about touching. I was just 30, I think my daughter was born at that time, I had just finished my executive MBA at IIM Bangalore. And I decided to start Caratlane at the same time.


Siddhartha  13:04  

And you took a pause on your previous business that you had built in Chennai, or that was also there?


Mithun  13:08  

It was still running. So I never took a pause on that. If you think about the two businesses as well, they are both Design led. So that makes life that much easier. They both focus on very different customer segments. So if you have a thought, you just have to choose which of the businesses better align for that customer segment and work towards that. It didn’t come in the way. In fact, I would say that Jaipur Gems always complimented my efforts to build caratlane. In the first seven, eight years, there was a lot of help from there.


Siddhartha  13:38  

So tell us about the first four to five years of Caratlane.


Mithun  13:41  

Let me talk about the first three months. It took us 11 months to build a website, because there was no Shopify, there was literally no Magento at that point, there was something called OS commerce. And that’s what we were building it on. And we built it in a manner, which I think wasn’t the best way to build it, but my co-founder then, Sreenivasa Gopalan, and his firm, Lister Technologies were building that out for us, that really helped us sort of get ahead. But at the same time, they lacked expertise in web applications. And because they lacked expertise in web applications, it costs us a lot more than we would’ve liked. Can you imagine building a website in 2008 costed us almost two crore rupees.


Siddhartha  14:23  

It’s impossible to spend so much on a website.


Mithun  14:27  

Yes, today you wouldn’t even think about it. What were you even thinking and doing? And that’s what platforms have really done today, they would make it available to you for literally nothing on that. 


The second battle came to convince BlueDart to ship jewelry from here to there, to carry these parcels and take it across further? They were like, why would I do this? I mean, this is high value, high risk, low volume, it just doesn’t work with our philosophy, but we really had to convince them. I mean, at this time, when we were convincing BlueDart, there’s another courier company called SkyPack. They sort of helped us .The competitive environment made BlueDart do it for us as well. 


The third was the bank. And I remember the first transaction that happened, which took a few months and a person, I don’t want to name the customer. But he was buying a pair of solitaires for his mom, and he was in Japan. And when he wanted to buy this for his mom, he tried to swipe on a payment gateway and wouldn’t go through. It made me discover that HDFC had a lock of 10,000 rupees for anything, which is a foreign payment. So we had to go to their office trying to convince them to accept this payment. A genuine customer wants to do this transaction. We had to give them a five lakh rupee deposit for them to accept that money, and allow that to happen. Because there was no CC-Avenue and they were not even interested in our business at that point. They weren’t even looking at it. 


So we had to set up couriers, convince them then set up payment gateways, convince them. We had to house a website, we could not even build on a platform or anything. Those were the challenges of the early days. And the best part is you imagine you get everything ready and you’re opening your shop and you want to do business. I don’t know if any of you have seen this old Hindi movie called ‘Jaane bhi do Yaaron’. And there are these two guys, very funny guys who open a camera store and nobody shows up. And that’s exactly what happened to us for the first two months, nobody showed up. And that’s when I learned a very big lesson in life that just because you open a shop doesn’t mean it’s your birthright that customers will come to shop there. And that lesson is such an important lesson that today when you build a product, you have to think a lot as to why the customer will come to buy there. And I think that was a very big moment for us. 


We realized three, four months into it that this is going to be a long game, we’re not going to be able to do this in a short time. And so we got to solve for cashflow, we don’t have that much money. 75 lakhs I’ve put in, 26 lakhs Gopal’s company put in, we had some more loans, etc, that we’d agreed on. So how much do you stretch, maybe 1.5? We’re not going beyond that. So we went and convinced Titan at that point. Saying that, look, we built this, this repository of solitaires real time from everybody else.


Siddhartha 17:03

it was just Solitaires? 


Mithun 17:05

No, it was jewelry also, but for them what made sense was solitaires. And you guys are not able to sell solitaires, we can bring this live feed into your store. And we’ll run the supply chain for it. And we’ll make a fixed markup on it. So with a lot of resistance from their buying team, because they will see it as an expensive buying solution to the point that the marketing team understood that this is not a buying solution but a selling tool, which helps the store to be able to sell based on real time information. They took that on after one year of convincing and that once took on, And the pilot was supposed to be 12 stores in one year but instead in two months it became 50 stores. 


We really built a robust cash flow for ourselves. And that’s where the cash kept coming in. But we kept deploying back into building a consumer business. Till about 2011 when Tigre Global came in, and life just changed for us after that. 


Siddhartha 17:57

So what was the first check from TigerGlobal?


Mithun 18:00

6 million. We didn’t raise seed, angel or Series A, we just didn’t do much of that stuff. Because of this Titan cashflow that we were doing. We basically build a positive cash flow business, then they would pay us in seven days. And we would pay the vendors in 60 days. So that 53 days of free cash flow that we created. We built our business on that.


Siddhartha  18:21  

So what you were able to build for Titan is a live catalog on a computer for their set of customers. The customer would place the order, it was a white label solution as I understand. 


Mithun  18:31  

I think of it a bit like Amadeus or Galileo in the travel business. So they have all the airlines whose feed is running on their platform, and they would give a pipe to MakeMyTrip, ClearTrip and everybody else across and that’s really how it would play out. That’s really what we built for the jewelry business, except that it was unbranded so they didn’t know who the supplier was.


Siddhartha  18:48  

And it was finally coming in as Titan branding or Caratlane branding?


Mithun  18:51  

It was sold as the Titan brand. We would sell it to Titan as a B2B.


Siddhartha  18:55  

So this made you for example, a few crores in revenue per year? 


Mithun 19:00

50 crores. 


Siddhartha 19:01

50 crores in revenue by when?


Mithun 19:02

By year two.


Siddhartha 19:04

Year two, which is like 2010.


Mithun 19:08  

. 2011 Maybe, because we really started in 2008. October. So , we count nine onwards as revenue years.


Siddhartha  19:14  

So 2011, 50 Crores you were doing. This is GMV or revenue? 


Mithun 19:18

We always looked at revenue only.


Siddhartha 19:22

So 50 Crores in revenue is almost like 10 million.


Mithun  19:27  

But it’s B2B revenue. So you don’t look at it the same way as a B2C business. I mean, nowadays, even B2B businesses get funded like that. But at that time, Tiger was not interested in that business at all. Their entire interest was in what we could do using our thought process on the consumer side of the business. And that’s what we were building out.


Siddhartha 19:43  

So once you took money from Tiger, you launched the B2C site.


Mithun  19:47  

We already had our B2C site, our revenue was very small. I think in 2011-12, our revenue was about 12 crores at that point, okay. And so we kept building that on from there and Tiger was with us from then to 2016 and when they left with Growing about 10x or 12x, we were at 140 crores of revenue by then.


Siddhartha  20:05  

So by 2011 You were already at 50 crores combined revenue.


Mithun  20:11  

I’m only seeing the consumer revenue. so the 12 Crores of consumer revenue went to 125 or 140 Somewhere between that my memory fades to an exact number at that point. 


Siddhartha 20:22

And what happened to the B2B part? 


Mithun 20:24

That kept coming down, because Titan saw that as a risk as well, they’re in. And we also didn’t focus on growing that but we actually had only one customer. We never even built a second customer for that business, because the job that was supposed to do was already done. And we had managed to build the cash flow needed and then raise capital to build this out as well. So it was absolutely fine for us.


Siddhartha 20:47  

That’s an amazing journey. Being a 50 Crore business then raising $10 million, which was like almost 50 crores back then.


Mithun 20:55  

, but the way to look at it now,  and I’ve always looked at it top line and the jewelry business is overrated. You should look at it from a gross margin point of view. And so at 50 crores, we were doing 5-6%. It was more the cash flow, which was interesting. The 53 days of free cash made it very exciting for us because that means you could do a lot of things in 53 days and on a rising basis, you could have that run infinite.


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Siddhartha 21:57  

Tell us about the journey after Tiger.


Mithun  21:59  

So, Tiger gave us money to experiment a lot, and we learned a lot about it. The whole aim in a VC journey in the first part of it definitely is to figure out what’s the right business model. And it took us about four years to figure out from 12 to 16 what the right model was, and we figured out that the true model for us is that people are engaging tremendously with us digitally. But when it comes to the moment of truth, they want to have a trial. So we built a great try at home business, we had built a very nice set of stores off which the first few were rank failures. But we didn’t give up and we sort of remodeled them again and built those out. Till in 2014, I think I remember when our Bangalore store opened somewhere in August 2014. It could be a few months here, there off. When that store opened, I think the first Sunday, the second Sunday, we had to close the shutters down. And we realized the power of the internet at that point, that you could in Whitefield area build so much traffic digitally, that by the time come the moment of truth, when you open the store everybody’s flocking in to by and then seeing a lot more people more people come by and want to see what the hell is going on over here. And that’s how we really became successful. 


So by 2015, we had that model figured out and in 2015 Tiger decided to put another 30 million in the business. Every time we will get money we try to reach out to Titan and say that, hey, would you guys want to participate in this? And so, in 2015, towards the end, they said that , we want to participate. And the journey then went on where they bought our Tiger global. And in 2016 We became a part of the Titan family and 140 crores in revenue, then 150 Crore or something like that


Siddhartha  23:44  

So at that point of time I remember you were valued at 600 crores. 


Mithun 23:48

, 570 crores to be precise. 


Siddhartha 23:51

So they bought out Tiger for 200 or 250 Cr?


Mithun  23:56  

350 Cr. They own 62% of business then. 


Siddhartha  23:58  

Tiger Owned?


Mithun  24:01  

, because every time they put money, it costs us and Titan only did the secondary no primary. They didn’t put any money in the business.


Siddhartha 24:10  

Got it. So in 2016 You became the single largest shareholder, individual shareholder? Except the title? But people assume that after acquisition the founder sells their part of the equity.


Mithun  24:25  

, So what happened was, in the first year, I found it very challenging to work with Titan. And I attribute those challenges a lot to myself also. You walk into a relationship with a business sometimes thinking way too much of what you will get as opposed to what’s realistically possible because they have their own business to run. They’re not opening a school right to come and teach me how to run my businesses also so I found it very challenging. And I remember I went to meet Rakesh Jhunjhunwala one evening, and I call him mama, just a relationship that we developed over the years. And so I said ‘Mama, I’m fed up. I don’t know, I can’t do this anymore.‘ So he says, ‘Okay, where’s the business? What’s going on? 

He said you’re growing. What’s the problem?’ I said, these relationship issues and  what I expected I’ll get I’m not getting and then they questioned me about it and they presented their own plan, blah, blah, blah, blah. like a spoiled child, I was crying and he said it’s okay, come home at night, we’ll go out for dinner. We went for dinner. There are a few other people on the table,  Ramesh Damani, P Sheth and a few other big guys from the stock market. So he tells me to explain one of them, What is the business I’m building, what is the opportunity I see? And what’s it going to be like, if we did this thing? I remember Ramdev Agarwal explained to me and he said that look, if you build this business for the next five years, at a 40% CAGR and you make it profitable, you will get 100x return. And that’s what happens in every business from this stage onwards. 


So now you think whether it’s convenient for you to deal with these problems, and is it worth the 100x, or it’s not, I left that meeting, so charged in everything, I went back, and few weeks later, my co founder, and I were chatting, and I ended up buying him out. So here I went to dinner, thinking about taking advice to sell my business, and I ended up getting so charged that I ended up talking to him. And I think the difference was that he wasn’t there in that meeting. And since he was never operational in the business, he’d seen great money from it. So he decided to exit and I had a chance to buy him out. Thanks to Titan, they lent me the money to buy him out. We would have obviously liked me to have more skin in the game. So they did that at that point.


Siddhartha  26:46  

So you were a 38% shareholder after buying out your co-founder back then.


Mithun  26:51  

I was about 35% somewhere on that, maybe. And then over a period of time, Titan ended the secondary. I’m sorry, another primary in 2018. They put 99 crores in the company. And we were really shafted on that valuation. And that cost me a lot at that point. But they’ve also helped me buy the other equity as well, while the two are different things in my mind, I reconciled with that thought and sort of moved on with it. So that cost us and then we were left with 28% by the end of it.


Siddhartha  27:27  

And today you’re doing 2400 crores in revenue?


Mithun  27:31  

, we will do about 2300 crores somewhere on that revenue 10% EBIT as a business 200 crores in profit.


Siddhartha 27:38  

So, today 2300 crores in revenue, how many stores were when you were acquired, and how many today?


Mithun  27:43  

13 stores, then. that’s what you figured out at that point, that this is the model. In these PIN codes, you target and you open your stores over here, you’re going to build a great business in geographical terms. And so we expanded that model and first with 20 stores and 25 stores a year, till we got full confidence that it works. And now we’re gonna do 80 to 90 stores a year this year. 


Siddhartha 28:03

What is the total number of stores as of now?


Mithun 28:06

180 stores as we speak at this point, but if you think about all other businesses, 180 stores here gives you 2300 crores revenue, so the throughput per store is excellent. And the gross margin per store is also excellent.


Siddhartha 28:19  

So online is just the front facing part of it where people discover?


Mithun  28:23  

No, it’s a very large part of the business even today. But the only difference is that even if you order online and pick up in store, we’d call it with a store transaction. But the difference between many other businesses, which are in the similar segment, but not able to crack and become as large or grow as fast like I mean, we’ve had a CAGR of 55% for the last six years, is the digital engine. Without that I don’t think it would be the same.


Siddhartha  28:51  

So you took Ramdev Agarwal’s advice and took the business from 40% CAGR to 60% CAGR.


Mithun  28:58  

, I mean, that just happened. So , you pray that it happens where it happens. And at 60 I wonder why couldn’t we have done 70? , the human psyche is like that.


Siddhartha  29:06  

And the company today is valued at what? $2 billion?


Mithun  29:10  

We’re disappointed that it’s 2 billion. But it’s okay. When you don’t raise money, you don’t get spoken about the same way. I was disappointed with the valuation when I mentioned the end of 2018. I think even Titan realized I was disappointed. So I made it a point that we will not raise money ever again. Because as a loss making business with a strategic investor, it’s very difficult to make them understand that they’re not used to that model. And so we just put our heads down, decided that we’ll work everything out of our PnL and not our full balance sheet and build an entire business out of that. And that’s what we ended up doing. And what it taught us a lot is that efficiency matters a lot. And if you think about it, let’s say 2 billion this business is. It’s been created in the last 14 years with a total capital of 400 crores. 


So That’s a very good efficient business model. And if you think, I can tell you in writing that out of that 200 crores I just destroyed them in bad decisions. So really 200 crores is what gives you that kind of returns? A lot of us have a lot to think about. What do we really do with the capital when it comes from VCs?


Siddhartha 30:18  

So I would call then Caratlane to be the first scaled D2C brand of India.


Mithun  30:23  

No LensCart is also there. And there is Boat and there are a few others as well. See the race to be the first is an overrated race. I think we are one of the best, you must always have peers. Would you want to be the only man on the moon? 


Siddhartha  30:37  

I would just touch the moon and come back.


Mithun  30:42  

So this race to first is not an exciting race. You want to be with the elite group.  And sit over there. And I feel proud that we are one of the elite group brands around. And I feel happy for those who are part of the journey. And I have a little bit of a smile on my face when I see those who didn’t agree to invest in the business. But they’re all great friends and it’s been a great journey.


Siddhartha  31:05  

But building this part, the playbook to build the offline stores hasn’t been created before in India and in a D2C first brand.


Mithun  31:14  

I don’t know, I think we were the first ones to get off the blocks. But I will admit that Lenskart grew a lot faster than that. I think they did a very good job in terms of setting the pace of growth as well, also. But each business has its own constraints. When I say that we won’t raise capital then our ability to sort of deviate from plan became very low. And when you have the kind of money that they had available, I mean, they could afford to take the losses into it as well, if something went wrong. So that risk taking ability we didn’t have. Our stop loss would have hit a lot sooner.


Siddhartha  31:47  

So what’s next? A $1 billion revenue mark for you?


Mithun  31:50  

Oh, no. I think we set ourselves five years 10,000 crores I mean, I think more than a billion dollars unless there will be further depreciation goes in that direction. But , a 20% EBIT business is a long term healthy business, so we want to work towards that. That’s not the financial side. But that’s not the exciting stuff, the exciting stuff is what we are going to do for the customer. And till now we made a product available, a design available and a certain price point and made that happen. And my co-founder Avnish, who I have a huge respect for, he’s a voracious reader. And he got me thinking, with this whole job to be done, sort of theory. And we realized while going through that whole process that why do people really buy jewelry? And he’d asked me this question all the time. But why do you think people are buying jewelry? And I’ll be like, why do you have a problem that they’re buying? 


But that question was a lot deeper than that. And finally, we figured out at least,  in one of my moments, I had this eureka moment where I kind of spoke to him about and I think together, we articulated it, where people really buy jewelry to express an emotion. 70,000 people in a particular quarter in caratlane. had given gift cards, those gift cards are personalized messages, but typed by a computer and sent across. What is the possibility that that typed message means something to them, as opposed to a handwritten message? A handwritten letter would mean a lot more people lose these messages, which are the computer type. And so and if I was to ask you, what did you give a loved one on your first anniversary? Or on a 15th birthday or something like that? And what is the message that you exactly gave? There are enough chances of one of the two forgetting what it exactly was. So we need to solve this problem. 


And as we’ve been working on it, we now want to solve for emotions that way, say that these emotions have to be permanently marked on that piece of jewelry and not in more than what is currently done across. And that’s become our mission for the next five to 10 years. We are going to help people express emotions through this beautiful form factor called jewelry. Because if you want to express an emotion you choose jewelry as a form of I mean, you do this only for someone you really care for you don’t go gifting jewelry just randomly like that. So it deserves that effort put in by the business as well, to make sure this emotion stays for life.


Siddhartha  34:24  

Wow. How will you measure the business now? So one is the revenue part? What are the other things?


Mithun  34:29  

So you know what I love about different businesses when you see around us? We think of ourselves a bit like a SaaS business when it comes to customer lifecycle management. And you will appreciate that because you love to invest in SaaS businesses, a lot of jewelry businesses have a very low repeat rate. Now I’m going to redefine repeat rate for jewelry context and not from a SaaS context or from a D2C context. Of all the people who bought jewelry up to 31st March 2022. For example, how many will buy in the next financial year if you were to look at this metric, . Which is compounding in some sense in your business. What do you think is the average for the jewelry business?


Siddhartha 39:09

Could be 15 to 20% 


Mithun 39:11

3.5-4%. 4% of your lifetime customer shop in the current year that you’re looking to buy, that’s how bad it is. Once we understood that, we realized that we are completely missing out on compounding. And I think we were at 9% at that point. So what does it take to make somebody buy again, and it’s not like that person’s not buying, that person is buying, but it’s just going somewhere else and buying? And why does he go and buy somewhere else because his need is not fulfilled by what you’re doing, or somebody else is attracting him better than that. Now, when you’re digital, you can attract better people than somebody else. Need not being fulfilled means catalog is not matching, on whatever the occasion. 


So we decided to design our business to be the best solution for a customer between the first anniversary to their 15th anniversary. Every occasion that comes across, we will have something solved for every keyword that the customer thinks of between the first and the 15th anniversary, we will have a solution for that. So if I was to ask a customer between first and 5th anniversary, the answers I’d get are hoops, Huggies, studs, dangling earrings, I’ll get the fifth anniversary so it might be that the man is thinking about a solitaire, and things like that. So it’s a catalog, which also contains each of these things.


Somebody will have a child, childbirth jewelry, which is Nazariya and different things also solve for that. Child is three years old, and we have the rights for Peppa Pig. A three to four year old kid is always in the Peppa Pig zone in India. 7-8 years in Doraemon. That’s with caratlane also. All the way to a teenager, which is Harry Potter, that’s with caratlane as well also. So we literally have done Customer Lifecycle Management and built this catalog, which goes all the way through learning from the SaaS companies, because we sit in Chennai.


Siddhartha 36:54

The SaaS capital of India. 


Mithun 36:55

, The SaaS capital of India. And we sort of built that whole business out. And that which is the average of industry is 4%. We are now at a 25% repeat rate. And so 25% of our lifetime customers will shop again this year. And that’s massive compounding, if you think about it from a business perspective. So big a metric for us to look at, the number of customers, and how do we solve for them. We set ourselves a goal of 10 million customers when we were at 10,000. But it looks more likely that we should set ourselves at 50 million now. Because there are things happening at Caratlane as we speak, which are going to deliver that kind of number and maybe a year itself. So and so 50 million customers 10000 crores in revenue, 20% EBIT, then 25% repeat rate, well, fantastic metrics. And above all, I would love to see this become India’s largest direct to consumer business. I mean, the world’s largest direct to consumer business, India’s largest we already are, but it has to become the world’s largest. 


Because you think about the jewelry business, like software is to the rest of the world,  We are the backend for everybody. The services make such a big part of this country. Jewelry also is like that. India is the backend for the rest of the world. About 40% of jewelry sold in America is made in India. Nine out of 10 Diamonds sold in the world are made in India, but we capture only 8% of the world’s gross margin. It’s time that we move something forward. And that only happens when you take brands ahead and not wholesale. And our aim is to do that.


Siddhartha  38:19  

And today, Titan is a $70 billion valued brand in the market.


Mithun 38:27

No, 20 billion. 24 billion to be precise.


Siddhartha 38:30

And you are almost like a 10% part of it today. And this all happened in the last 5-6 years.


Mithun  38:36  

. So when we came in, we were 0.1%. At 20,000 crores we were at 140 crores of sales, 0.4, whatever that number was. Today, we are nearing about 8-10% on that. But that happens, right when something runs right, then the number that you get is significantly stronger. And together we are that, individually not. So you can’t take that credit away from the fact that it’s been a great partnership. There’s a massive entrepreneurial spirit at Caratlane. And there’s great strategic value that Titan brings in. And the combination of two, I think the world should take notice of when two of these forces combine, what can happen. 


Siddhartha  39:13  

It’s so rare, how Tata Group is able to marry the entrepreneurs to the business. Still, after the acquisition, we have seen it again, 1mg, BigBasket, Caratlane. Why do you think they are able to do it and not anybody else? 


Mithun 39:27  

Well, I think we have to wait and see how it all plays out. But the intent that they have is amazing, because they’re manager driven in many cases. And they’re looking to build businesses for perpetuity when you’re looking to build businesses for perpetuity time is your biggest ally. If I have Avnish Telling me about a Jeff Bezos comment when we were talking about it, he says, Mithun, it just sounds a lot like that. He says, while everybody else has a one or two year horizon, I have a big strategic advantage because I keep everything with a minimum seven year horizon. I mean, he does the seven year horizon time becomes the biggest ally. And I think Tata has that as well. As long as they stay true to this programme, and to this course where they keep supporting entrepreneurs, they will beat out all those who have short term goals on that.


Siddhartha  40:16  

Like, for example, they could have offered you 100% acquisition in 2016. Would you have taken it?


Mithun  40:23  

No. I didn’t need money. They didn’t put any secondary in it. So, let me dial back. Why do you take money from a VC? You take money for two reasons. You want to build a brand? ,  Second, do you want to buy inventory or spend on that? When you partner with a strategic house, like Tata, what are you getting? You’re getting a brand, and you get their balance sheet, because if they are majority shareholders, any bank is willing to give you money on that part. So you can solve the same problem. And to do that, I gave them a discount for them to enter the business as well. So for that reason, they were right in asking that.


Siddhartha  40:57  

They entered at less than 4x revenue multiple?


Mithun  41:01  

Not that. They entered at around. The harder task was to convince Tiger to leave. They just put in money, right at that point. And they and it was a slight, I mean, they came in at 600, it was at 570. The currency fluctuation had hurt them. So they had to exit at possibly a flat round at that point. And it was a harder thing for me to do. I could have easily said 180 crores in the bank, I don’t think I need anybody’s help to do anything. And but no, and it didn’t. But credit to them that they realize as well that the entrepreneurial spirit is needed to do this thing. But to your question without a soul. No, I wouldn’t have then I will just continue on my own path.


Siddhartha  41:38  

If you look at hindsight, do you think you could have said Tiger has just entered at 600 crores valuation? If I were to give them an exit? Why would I give them less than 1000 crore?


Mithun  41:50  

Could I have done that? Of course I tried. But the need to get Titan in, in my mind, was far greater than that. I mean, Titan was willing to have a Tiger as well also and continue on the cap table. But Tiger was very clear that if a strategy comes in, then I don’t want to be around at that point. And also they had a lot of pain going on with the Flipkart at that point. So I think some of those things paid in our favor as well also. 


Siddhartha 42:17  

Awesome. But it’s very hard to imagine  such kind of a marriage taking place successfully. There are very few examples in India.


Mithun  42:26  

My life has been like that. I mean, if you think about it, I was born and brought up as a Bombay kid, Living in Chennai.


Siddhartha 42:35  

Which is absolutely disastrous for a Bombay boy.


Mithun  42:37  

I actually don’t think so. It was my chosen home. But for a lot of people it is yes, I agree with you. My wife is a thoroughbred born and brought up Manhattan girl, lives in Chennai over here. So my work has been like that as well also. So the challenge I took on was also a little crazy, one can say that you have a running business, but you decided to do this thing. So I like a little bit of madness, and what’s life without a little drama?


Siddhartha  43:02  

So what are the things that you have learned in the six years of partnership with Tata?


Mithun  43:07  

The biggest thing they teach you is patience, which I didn’t have. A lot of impatience in me. I think Tatas are great, they have great virtue, and their hearts are in the right place. And they try their best to at least get 70% of the organization aligned to having the heart in the right place, there are always going to be 20-30%, you have to deal with who is going to be there. But you hope that the 70% prevails on them on that. I think they’re never short term thinkers. They’re always long term thinkers. And they’re happy to lose today. For a greater tomorrow. I have seen that multiple times over whether it was Demonetization and a few other occasions Other than that, and I’ve seen that play out, I’ve had two of the best, I would say two of the best teachers in both Bhasker, who was the MD of Titan, then and Venket was the CEO of the jewelry division then, and I don’t think I could have had anybody else. And the third person who I will always be grateful to is Subu, the CFO of Titan then, I mean, he literally fought to make this thing happen. So if you believe in something then you really go for it, but you never marry it so hard your heart that if it doesn’t happen, that your life shakes up, that’s something that I’ve seen as a great trait in them. 


I think there are also many things you learn what not to do. Because in being nice, they also get so caught up that sometimes they’re super nice, and they’re not to make tough decisions on that. And that’s something which is very equally important to take. I remember watching and reading about code once I decided I want to learn coding. And in algorithms, something that spoke way, at least what I understood of it, but it makes sense to me. Maybe it’s not true. Is that actually no gives you more insight than yes gives you so think about Netflix when people say no for a movie It’s far more insightful than when people give a thumbs up for a movie on that, and they put a lot more value to it. 


And if you take that real life, then you think about it that people should learn to help other people by saying no to them. Because in the long run, they all have to believe that that guy also got only one life. And so he will go a lot further, if you find the right place for himself. That’s the right place for everybody, the right company for everybody, the right partner, everybody. By being silent, you sort of let him float. But you would not do justice to that person, or his life over a long period, he’ll always be better. But he’ll be around.


Siddhartha  45:35  

Were you so philosophical before the acquisition or Tata made you so philosophical?


Mithun  45:39  

Now I like to think I like to analyze and education also is like that, I mean, the aim of education should never be to excel. But it should be to be able to learn how to synthesize and I enjoy that.  I mean, I run a class in a school over here, calling for entrepreneurship. It’s actually a guise, it’s really not entrepreneurship, it’s problem solving. And I feel that my most conversation with those kids also is about how do you synthesize what you’re learning? In life, the hardest thing is not to find the answer, but to find the right questions. And so I look forward to always figuring out what’s the next question that we’re gonna solve?


Siddhartha 46:15  

So what’s the next question for you right now?


Mithun  46:17  

I mean, there are obviously some questions I can’t speak about. And then there are those questions. I mean, I feel like such a fool. For 14 years, I didn’t realize that I was helping people solve, express emotions, I was just selling jewelry. And I feel like such a fool about that. But I’m excited to solve that right now. I also feel that we need to do more with the jewelry we’ve sold to people. If you think about the role of jewelry in people’s life in the 1800s, the 1700s, money had a limited role, there was no currency as such gold was the currency in some form, land did not have rental income, you had agricultural produce, you could get that. And banks didn’t exist really as such. 


So the role of gold was very prominent. Circa 2022. Banks give you fixed deposits. IOUs, everything could be done. Land is fully fungible, you can borrow against it, you can rent it out to someone, you can discount the rent for the next 10 years and do that as well. Also, gold is exactly where it is. One has to take the mantle to say that gold has to become both fungible, easy to store and solve for all the things that it stood for, in relation to the other two commodities. And I feel like that’s the problem I wanna take on and solve.


Siddhartha  47:29  

Gold is the new crypto.


Mithun  47:33  

I don’t know, Crypto is too smart for me. But gold is certainly an asset of value. And an asset of value must always be fully fungible. It’s not today. I mean, gold loan, if you look at it, it’s such a terrible market. Because while it is so easy to cash, the interest rates are crazy. It just doesn’t make sense. And then all those people who don’t need money for them, gold is just an asset sitting over there. And the government wants to solve it, but then is not able to solve it. So I think it needs an entrepreneurial spirit to go and solve that problem. And I think for me, all those husbands and all those wives, and also many of them who came to the store, always said but as much as I like wearing jewelry, buying jewelry is a dead investment. I want to solve that statement. It’s not a dead investment.


Siddhartha  48:22  

I have one insight. For the last five and half years I and Nansi have been married, we have either gone to Tanishq or Caratlane and the positioning has been, when buying for design, go to Caratlane, when trying to buy heavy jewelry or 22 Carat, go to Tanishq. And we have found it all, or like instances, the service of Caratlane to be better than Tanishq.


Mithun  48:48  

Oh, I will work on helping Tanishq guys to give better service. But don’t make me say things. Don’t say things that will make me lose my job. I think a younger organization finds it easier. It’s just scale has its own challenges as well also, complacency sets in when you’re accomplished in that sense. But I must say that in large organizations, if you were to compare, they would do a very good job as compared to other large organizations.


Siddhartha  49:16  

And you have also given back to entrepreneurship by being an active angel investor, tell us more about your role than which are the companies.


Mithun  49:23  

I actually stay very silent about it. It’s not something I speak in public domain about because it’s a personal investment that should stay personal. I don’t understand why people keep writing about it everywhere that I’m doing this and doing that.


Siddhartha  49:36  

Any specific company or domain that you’re really bullish about?


Mithun  49:41  

I mean, obviously, if you live in Chennai, you have to be bullish about SaaS, there is just no way that you can’t. Even in a market like this, the value that Chennai & India can provide to the world through SaaS is phenomenal. I also feel that almost every sector of the consumer will be disrupted by D2C. The incumbents will get disrupted. just by the sheer fact that they’re not doing enough to morph themselves. So when I see opportunities with entrepreneurs who are willing to do that, who need to have three skill sets, one, they must understand digital really, really well. Second, they must know how to create and generate demand, they should not be satisfying demand, they should be generating demand. And third is they must be rock solid in merchandise understanding. 


So, the world has become discerning, you can’t just go and try and sell any trash, you need to be able to sell significantly better quality merchandise. I mean, look at the t-shirt brands that come on Instagram nowadays, the quality of advertising is just phenomenal. I feel embarrassed when I see that I didn’t even know all this for 20 years. And now when I just look at an ad, and I learned so much about it, it’s happening because obviously those entrepreneurs know what they’re doing. If I had to buy a shirt today, I would go to Bombay Shirt Company, I think just the basis of the advertising that I see of what all they teach me about it, or at least would be my consideration. So even if I didn’t buy from them. If I had to buy a t-shirt, I would think about MarchTee. And I’d go and do things like that. And for me, all of these are investable businesses, because they’re really going much deeper than what others are doing. And I’m sure if some expertise of what we’ve built can be married over there. We’d build a great partnership with them.


Siddhartha  51:20  

Thank you so much. It’s been a wonderful experience. Learning your journey, learning the journey of Caratlane. It is amazing, how you became one of the most loved D2C brands of India.


Mithun  51:31  

Thank you so much Siddhartha. Thank you and thank you for coming all the way to Chennai for this.


Siddhartha  51:35  

It’s been worth it.



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