Pure Di­a­mond Farm eyes US$200M on ICO to fuel growth of lab-grown diamonds busi­ness

Two-thirds of the fund will go to plant and equip­ment in­vest­ment, in­tel­lec­tual prop­erty rights, and R&D.

Singapore Business Review - - STARTUPS -

When Hideyuki Abe estab­lished Pure Di­a­mond Farm, a com­pany that is look­ing to man­u­fac­ture lab­grown diamonds that ex­hibit com­pletely the same char­ac­ter­is­tics as na­ture-made ones, he ditched the tra­di­tional fundrais­ing route and is now eye­ing to raise US$200M through a to­ken sale. The de­cid­ing fac­tor was speed, and Abe be­lieved that it was im­por­tant to get a firm foot­ing in what he be­lieves will be a highly promis­ing in­dus­try due to the in­trin­sic ad­van­tages that lab-grown diamonds pro­vide com­pared to ex­pen­sive, low-sup­ply na­ture-made diamonds. “This mar­ket is new and I wanted to start this pro­ject as soon as pos­si­ble, so I chose ICO in Sin­ga­pore.” Abe said.

A favourable mar­ket

Abe, who has fa­mil­iar­ity with launch­ing ICOS through his other com­pany, said the most im­por­tant as­pect with the Pure Di­a­mond Farm pro­ject is speed as other play­ers, in­clud­ing big-name jew­ellery brands start to also look into mak­ing lab-grown diamonds. “With the vast knowl­edge and blockchain ex­per­tise of Jun Kawasaki, the white hat hacker who solved Ja­pan’s high-pro­file NEM coins theft, we’re con­fi­dent that our blockchain will be highly stable and equipped with strong se­cu­rity fea­tures to pre­vent cryp­tocur­rency hacks and theft,” he said.

The Pure Di­a­mond ICO is sched­uled on Septem­ber 11 to Novem­ber 15, 2018, and the com­pany will of­fer in­vestors cryp­to­graphic cur­rency called Pure Di­a­mond Coin, which can then be used for trad­ing its lab-grown diamonds that take around one-a-half months to pro­duce from a process in­volv­ing car­bon, gas and elec­tric­ity. “Lab-grown diamonds can have a lot of dif­fer­ent col­ors and sizes that na­ture-made diamonds can­not or may be very dif­fi­cult to have,” he said. “It’s quite dif­fi­cult to make na­ture-made diamonds very thick. But for lab-grown diamonds, it is easy to cre­ate any type and size -- so if you want to make the ideal jew­ellery pieces, it’s easy to de­sign and make dif­fer­ent col­ors and shapes.”

Abe is also con­fi­dent that the com­pany’s lab-grown diamonds, which he said has zero im­pu­ri­ties, will fetch a high value in the mar­ket, cit­ing how na­ture-made diamonds with a lot of im­pu­ri­ties still sell for a high price. He es­ti­mated that 98% of na­ture-made diamonds are not very pure, with many other ma­te­ri­als mixed into the di­a­mond. Na­ture-made diamonds are also scarce, but lab-grown diamonds will have a more sta­bly sup­ply and pric­ing, he added.

Pure Di­a­mond Farm plans to use roughly two-thirds for the pro­ceeds from its ICO, which will end when the com­pany reaches the hard cap of US$200M, for plant and equip­ment in­vest­ment, re­search a nd devel­op­ment and in­tel­lec­tual prop­erty rights. The com­pany noted though that Pure Di­a­mond Coin to­ken hold­ers do not have the right to pur­chase a cer­tain amount of any phys­i­cal diamonds or sim­i­lar ben­e­fits, nor will they re­ceive any div­i­dends or rev­enue from the com­pany or its af­fil­i­ates. There is also no as­sur­ance that it will buy back Pure Di­a­mond Coin to­kens from any per­son. How­ever, Abe said the com­pany has a two-phase pro­ject plan to en­sure the sus­tain­abil­ity of the to­kens. The first phase is where in­vestors can ex­change Pure Di­a­mond Coin for lab­grown diamonds, which the com­pany then sells to re­tail shops and jew­elry brands, which in turn sell them to end-con­sumers. The sec­ond phase is when the com­pany pushes for the Pure Di­a­mond Coin to have “seg­men­tal func­tions” so they can be used for daily ex­penses such as buy­ing a train ticket or con­ve­nient store items. “We ex­pect there will be a B2B and B2C sys­tem that will be com­pletely fin­ished,” he said. Abe said the com­pany chose to cre­ate its own blockchain net­work be­cause it is dif­fer­ent from other vir­tual cur­ren­cies which are tied to vir­tual as­sets. “If you buy the Pure Di­a­mond Coin, the cap­i­tal will be used to buy real equip­ment to man­u­fac­ture diamonds. Af­ter all the in­fra­struc­ture is fin­ished, so the ma­chine can man­u­fac­ture diamonds ev­ery day, ev­ery year. ”

Pure Di­a­mond Farm also wanted to pro­vide trace­abil­ity for its lab-grown diamonds. “We ac­tu­ally use blockchain tech­nol­ogy to give trace­abil­ity to help the con­sumer know it’s birth­day, what cut it is and make it clear to the con­sumer what type of di­a­mond they hold. They can con­firm the value of their di­a­mond.”

“Through the blockchain tech­nol­ogy, we give ev­ery di­a­mond a story,” Abe added. “With na­ture-made diamonds, there is no story; you just know they just mined it from the moun­tain but you don’t know any other things about it.”

“The com­pany’s lab-grown diamonds, which he said has zero im­pu­ri­ties, will fetch a high value in the mar­ket.”

Left to Right: Shigeyuki Ishida, Pres­i­dent of Pure Di­a­mond Co. Ltd.; Chris Yang, Pres­i­dent of Pure Di­a­mond Farm Pte. Ltd. and Hideyuki Abe, Pres­i­dent of Pure Di­a­mond Lab Co. Ltd

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