Can buying a diamond be an act of ethical responsibility? Online jewelry retailer Brilliant Earth bets it is and plans to show everyone its worth by filing for a $100m IPO. Brilliant Earth uses recycled materials for its products and claims that all of its jewelry is “ethically sourced.” This means that when the company digs up raw materials it does so following the Alliance for Responsible Mining rules. Brilliant Earth also sends 5% of its net profit to charities helping African communities affected by blood diamonds.
Brilliant Earth has 13 showrooms across the US and has served over 370,000 customers through its online platform. The company’s sales went from $92m in H1 of 2020 to $163m in H1 of 2021. During the same timeframe, Brilliant Earth’s net profit surged from $182,000 to $11m. Part of this growth was fueled by the Covid-19 pandemic that caused wealthy people to have more disposable income lying around in their banks because they weren’t out spending as much at shops and restaurants (which were close meanwhile).
why it matters
Brilliant Earth is just the latest company contributing to this year's IPO surge. Proceeds from IPOs are on track to break the all-time high of $97b registered during the dot.com bubble. The reason why companies like Brilliant Earth are attempting IPOs is that stock valuations are high, anxiously waiting for an economic recovery.