How Diamond Foundry Is Using Vrai To Elevate Lab

Jun 07, 2023

"Diamond Foundry is proving with technology that we can create mining-scale diamond production to ... [+] the point that we won't need mined diamonds anymore," said Mona Akhavi, Vrai president and CEO. / AFP PHOTO / CHRIS J RATCLIFFE (Photo credit should read CHRIS J RATCLIFFE/AFP via Getty Images)

Couples are increasingly choosing a lab-grown diamond for their all-important diamond engagement ring purchase. The Wall Street Journal reported that more than one-third of U.S. couples chose a lab-grown center stone in 2022, based upon a survey conducted by The Knot among nearly 12,000 engaged couples.

Younger couples purchase lab-growns at a far higher rate than the older cohort – 37% for shoppers 18-to-34 years compared with 24% for those 35 years and older.

This signals a trend that will only increase the penetration of lab-grown diamonds in the market, which jewelry analytics firm Tenoris reports reached nearly half of loose diamond unit sales early this year.

The appeal of lab-grown diamonds (LGD) over the mined diamond alternative is crystal clear. Couples on a budget can buy a comparable-quality stone for less money, and most couples start their shopping journey with one.

For example, the average retail price for a two-carat LGD has fallen under $4,700, making them about 30% cheaper than the price for a one-carat mined stone, according to Edahn Golan, industry expert and Tenoris principal.

And those LGDs don't come with the added baggage of the environmental damage caused by digging precious stones out of the earth. While the Natural Diamond Council and its members work to minimize it, mining remains a destructive process.

Even Pope Francis warns about it, stating that mining results in an "extraction of wealth from land that paradoxically does not produce wealth for the local populations who remain poor." And His Holiness has given the Diamond Foundry, the top U.S. producer of lab-grown diamonds, his blessing for its efforts to present an alternative.

Increasingly, consumers perceive lab-grown diamonds as the socially and environmentally responsible choice, not to mention the best value for the money.

So with the angels and market forces on Diamond Foundry's side, it has tailwinds to carry it forward to the next challenge: elevating lab-grown diamonds to true luxury status.

So far, there have been some attempts to storm the luxury castle. Most notable are LVMH Venture's investment in Israel-based solar-powered producer Lusix, though only Breitling and Tag Heuer have used LGD, not in jewelry but in watches.

And the Paris-based Jean Dousett brand exclusively uses lab-grown diamonds in its designs. Dousett is the great-great grandson of Louis Cartier, so the brand has luxury credentials. Besides his family heritage, Dousett honed his craft working with such esteemed brands as Chaumet, Alain Boucheron, and Van Cleef & Arpels.

Now Diamond Foundry wants to push into the true luxury sphere without any luxury legacy but through technology, next-gen consumer demand and marketing savvy.

Vrai, its digital-native consumer-facing jewelry brand, is the leverage it will use to break down the barriers to entry. Recent collaborations with Balmain, Givenchy and Dover Street Market prove its mettle.

"With the Diamond Foundry behind us, Vrai is one of the only vertically-integrated jewelry brands in the world," shared Mona Akhavi, president and CEO of Vrai, following a stint as Diamond Foundry's vice president of marketing.

"We offer jewelry in a way that consumers never had, democratizing the jewelry industry where customers can know their diamond was grown in our American zero-emission foundry that has been carbon neutral since 2019."

And she added, "From the moment that the diamond grows to the moment it's in a ring or a piece of jewelry, we control the entire process."

Diamond Foundry was the brainchild of a team of engineers from M.I.T., Sanford and Princeton and experts in solar power who saw the opportunity to use it to grow man-made diamonds. The company was founded in 2012 by current CEO Martin Roschelsen, president Kyle Gazay and Jeremy Scholz, who has since left the company.

Several years in and many experiments later, the company accomplished its mission. It developed a reactor that could generate plasma as hot as the outer layers of the sun, enabling the company to grow diamonds in just two weeks in its San Francisco facility.

By 2015 it was ready for prime time and investors joined in, including Leonardo DiCaprio, whose consciousness about the mined diamond industry was raised while starring in Blood Diamonds.

Numerous awards later, including being named one of Business Insider's "21 Most Innovative Tech Startups" and CNBC's "Top 50 Disrupters," and building a high-production hydro-powered facility in Wenatchee, WA, it acquired digitally-native Vrai and Oro jewelry company in 2016, combining them into one as Vrai to lean into the consumer-side of the LGD market.

In 2021 Diamond Foundry was valued at $1.8 billion following a $200 million investment by Fidelity, with the funds targeted to quintuple production in its Washington state foundry to approximately five million carats a year. And most recently, it announced it is building an $850 million solar-powered production facility in Spain that will come online in 2025.

"Once the Spanish foundry gets up and running, we’ll be producing 20 million carats of rough per year, which is about 60% of what DeBeers is mining now. Diamond Foundry is proving with technology that we can create mining-scale diamond production to the point that we won't need mined diamonds anymore," Akhavi said.

Since acquiring Vrai, Diamond Foundry has been systematically growing the jewelry side of its business. It aims to be fully transparent end-to-end with consumers, and how its vertically-integrated business model makes it a diamond jewelry brand shoppers can trust.

"It's a black box when you buy diamond jewelry. A mined diamond can change hands 15 times, and a markup is transferred to the end consumer each time. We have full transparency throughout our supply chain, which can be limiting for other jewelry brands," Akhavi said.

Originally founded in 2014, Vrai was an online pioneer in retailing lab-grown diamond jewelry. Upon Diamond Foundry's acquisition, it kept its digital-first focus, specializing in customized settings and an extensive range of different shapes. That served it well during the pandemic closures.

But after the pandemic, brick-and-mortar retail was calling, and Vrai began opening showrooms, starting with Los Angeles in September 2021. Now it operates 14 locations, including one in London, six in China and seven in North America, including the just-opened Toronto store. Three more showrooms are planned for this year, including one in Madrid.

Vrai is carrying its legacy for custom design and specialty shapes forward with a "Cut For You" offering online or in the showroom under a consultant's guidance. "With only four clicks on the website, we can customize the customer's piece in 400 different ways," Akhavi shared.

On offer are 30 different diamond shapes, including all the usual suspects, like round, oval, emerald and pear shapes, as well as a heart, long hexagon, marquise and more, in a range of carat sizes.

After selecting the shape and size, customers are presented with an image of the rough stone and shown digitally how it will be cut to maximize its fire and brilliance and to minimize inclusions, which happen even in LGDs.

Vrai isn't afraid to pull back the curtain and show customers what its rough stones look like because even in their raw state, they look good, like a "clean ice cube, because they are grown in a very controlled environment," she stated.

From there, customers can buy the cut and polished stone to take to their chosen jeweler or continue with Vrai to create their final jewelry piece.

The expanded Cut Your Own offering has been well received and its expanded range of shapes is pulling people in. Akhavi reports that about half of the diamonds it sells are the more traditional cuts, but 52% of stones are more specialized cuts not readily available elsewhere. And the average size of a diamond Vria sells is two carat-plus.

"People are open to buying larger lab-grown diamonds because there is no guilt and no compromise," she said. "And our Cut Your Own service is ultra-luxury. It's almost like going to a couture house and getting your clothes tailored for you. We bring that to our customers digitally and make it all accessible."

Akhavi concluded, "Buying diamond jewelry is such a special, luxury experience that is filled with meaning. We are delivering that luxury experience by focusing on value and meaning in their jewelry selections, whether it is the personal meaning of a milestone, like an engagement or anniversary, or the value of true sustainability. The entire experience must feel right so they can express themselves through that special jewelry piece."