Diamond Auctions Online: Benny De-Kalo, CEO of Worthy.com (Part 3)

Sramana Mitra: Who’s shopping to whom and when? When Jenny wants to get a GIA certification, is Jenny shipping directly to GIA, or is Jenny shipping to you and you are shipping to GIA?

Benny De-Kalo: The way it works is, Jenny goes online and describes her item to the best of her knowledge. Taking her information, we use our technology to get back to her with a value. If she describes it correctly, we assume that that’s the value that she should be getting. If she would like to move on, we create a prepaid shipping label, which is fully insured. The item goes directly to be graded by GIA. Once GIA finishes the grading, we receive the electronic grading report. Then it goes up on auction. My team also takes the images.

Sramana Mitra: The GIA ships the item back to you?

Benny De-Kalo: Yes.

Sramana Mitra: The seller is sending the item to GIA. You shepherd that process. The item then arrives, with GIA certification, to you. You take pictures and take the specifics of the GIA certification and you put it up for auction. The rest is regular auction process.

Benny De-Kalo: Almost right. There’s one step that you missed. Once it comes back from GIA, we recommend Jenny to set a reserve price. We’ll say, “Based on previous transactions, we recommend you put a reserve of $3,000.” Jenny makes a decision of whatever she likes. It goes on auction with the images and the certification, and also the reserve price. The buyers are welcome to start bidding.

She can sit down and see the bids rolling in real-time. When the auction ends, if there is a bid above the reserve, the highest one would win it. If the highest bid is below the reserve, then Jenny can make a decision whether she wants the item to be sold or be shipped back. We close about 85% of the auctions.

Sramana Mitra: Tell me a little bit about the specifics of how you built the business. On the concept, you got a certain amount of angel financing to get it started. How much money was that?

Benny De-Kalo: All in all, we’ve raised $17 million.

Sramana Mitra: What were the timings of those rounds? What milestones did you raise each round on?

Benny De-Kalo: The first round was $3 million. Then we raised an additional $5 million and then $9 million.

Sramana Mitra: When was the $5 million round?

Benny De-Kalo: Sometime in 2014.

Sramana Mitra: When you went out to raise the $5 million round, what were the metrics?

Benny De-Kalo: There were initial indications from the market in terms of the interest. There were strong indications that the metrics were not fully solid.

Sramana Mitra: But there were transactions on your site already?

Benny De-Kalo: Yes, of course.

Sramana Mitra: Did you have a million in revenue already by that time?

Benny De-Kalo: I would say so, yes.

Sramana Mitra: What is your commission level in the marketplace?

Benny De-Kalo: Around 20% to 30%.

This segment is part 3 in the series : Diamond Auctions Online: Benny De-Kalo, CEO of Worthy.com
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