In the extensive history of hip-hop, jewelry has always played a vital role in allowing artists to express their ideas and wealth, or simply to shine and impress onlookers. Diamonds, in particular, have been a significant symbol, famously demonstrated by Drake's $400,000 diamond-encrusted iPhone case.
However, not everyone is a millionaire rapper, and most people cannot afford to wear flashy watches covered in diamonds. Nevertheless, there is a market for such jewelry at a more affordable price point, and venture capitalists seem to have taken notice of this: Pascal, a direct-to-consumer diamond jewelry startup, has raised nearly $10 million in VC funding so far, with $2.5 million coming from Andreessen Horowitz in early 2023, as reported by TechCrunch.
The company is projected to generate $20-$30 million in revenue this year. According to the founder and CEO, Adam Hua, Pascal has a three-month customer repurchase rate of around 20%.
Pascal's concept revolves around making diamond jewelry accessible by utilizing lab-grown diamonds that possess similar chemical and physical properties to natural diamonds but cost a fraction of the price. The company's gem-studded jewelry starts at just $70, and it aims to establish a presence in the more affordable segment of the broader jewelry market by using cultivated diamonds.
“Diamonds hold a unique status in hip-hop culture, but not everyone can afford them,” said Hua. “Cultivated diamonds revolutionize the supply side of the industry.”
Synthetic diamonds have been in existence since the 1950s and have often been used to create high-carat jewelry. These diamonds are typically produced in laboratories through a process that involves applying extreme pressure and heat to graphite, akin to the natural formation of diamonds. Manufacturers of lab-grown diamonds often highlight the environmentally friendly aspects of their process and some even produce diamonds from captured carbon.
For Pascal, the focus is on "culture," and the company is not aiming to disrupt the natural diamond sector. Hua mentioned, “There will always be a demand for luxury diamonds, especially for jewelry like engagement rings. We are simply introducing a new, affordable diamond category.”
Pascal's diamond-embellished products range from watches to lipsticks and come in a variety of colors, a feature not commonly found in natural diamonds. Hua emphasized that lab-grown diamonds are also more brilliant, making them ideal for TikTok videos.
To source its supply, Pascal turned to Henan, a key province in central China that has emerged as a major synthetic diamond production center globally, as well as other manufacturing hubs in China's neighboring countries like Vietnam and Thailand.
“It's a naturally global business,” Hua stated about his company. Currently, the largest market for Pascal is the U.S., followed by Europe.
Hua has demonstrated a talent for operating fashion businesses. While studying physics at UC Berkeley, he imported sneakers from the U.S. to supply to resellers in China, which helped him earn his first million dollars. He later founded a peer-to-peer streetwear marketplace in China, which raised over $10 million in equity funding and generated $1 billion in gross merchandise value in its third year of operation. His experience running that company eventually led to the inception of Pascal.
“I noticed that most of my customers were from Gen Z, and their spending power was increasing over time,” he shared with TechCrunch. “By 2022-2023, the average purchase size had risen to $500, but there was a gap in the $500+ price category.”
While exploring consumer trends, Hua identified hip-hop fashion as a potential opportunity. He observed how fans of rock bands tended to buy clothing and items that ranged from $30 t-shirts and $200 sneakers to $500 leather jackets and $1,000 jewelry to express their cultural identity.
“What if there was a $500-$1,000 range of diamond products for hip-hop enthusiasts and other diamond aficionados?” he pondered. “People want to feel like they are getting value for their money when they purchase something of quality that aligns with their cultural passions.
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