Diamond Auctions Online: Benny De-Kalo, CEO of Worthy.com (Part 2)

Sramana Mitra: Why did you do this particular company? What was the idea that you started with and why that idea?

Benny De-Kalo: It took me a while to come up with the idea. I’m a finance person. At one point, we came up with an idea to finance consumers and try to provide loans against high valuations with very low interest rates. We soon found that the bigger pain of the consumers is that they cannot resell high-value items. We shifted the idea from providing loans to helping consumers liquidate high-value items.

Sramana Mitra: Was there a specific high-value item that you were going after or a specific price point that you were going after?

Benny De-Kalo: In terms of vision, it was to be the world’s first C2B marketplace for selling pre-owned valuables. We decided to start with diamonds and diamond rings. Currently, we help people to sell those diamond rings.

Sramana Mitra: How did you get this started?

Benny De-Kalo: We got it off the ground by getting some angel investment. We raised a few million dollars from technology investors.

Sramana Mitra: On an idea?

Benny De-Kalo: I believe they invested on the team.

Sramana Mitra: Who were these investors? Did you know them prior to starting this company?

Benny De-Kalo: Yes. I knew most of them. I focused on angels who come from technology. You’re dealing with high-risk investments and you want to know that your investors are aware of that.

Sramana Mitra: These are New York angels?

Benny De-Kalo: Yes, and also some Israeli angels.

Sramana Mitra: What year was this?

Benny De-Kalo: It was 2013.

Sramana Mitra: Who was on your team?

Benny De-Kalo: Gil Gadot who previously founded the company called Fundtech. He sold it for over $1 billion. He’s the CEO of the company. We also have experienced VP Engineering and VP Product.

Sramana Mitra: In terms of the marketplace that you were creating, what were the key differentiators or features of this marketplace? On some level, you could argue that somebody could sell a diamond ring on eBay or somebody could sell a diamond ring on an auction site like Auctionata. What was special about the platform that you were bringing in together to make it more attractive for selling the kinds of high value merchandise you were interested in transacting with.

Benny De-Kalo: Firstly, Worthy actually disrupts the traditional industry. We do it through technology and we do it by building trust and creating liquidity. For your question about competition, it’s important to understand where we are focusing. If you look at the market, jewelry retailers purchase diamonds worth $24 billion every year. They sell it to consumers for about $40 billion.

Of the $24 billion dollars that they purchase, they purchase $22.5 billion from De Beers. They purchase an additional $1.5 billion from households or what is known as recycled diamonds. The problem is, there’s no interaction between the consumer and the retailers. There’s no one place for them. The way it is being done is they have to go to pawnshops. The pawnshops sell it to the retailers. What’s important to mention is the fact that they cannot resell the diamonds through Worthy doesn’t make sense.

The new diamond is not different from a pre-owned diamond. A million years under the ground is no different from an additional three years on a lady’s finger. We try to make sure that our sellers understand that. That’s the problem. The reason is that there’s no marketplace. There’s lack of trust between sellers and buyers. Price discovery is not there. The description of a diamond is subjective so it’s very difficult to sell a diamond on eBay.

This segment is part 2 in the series : Diamond Auctions Online: Benny De-Kalo, CEO of Worthy.com
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