Paul Allen takes a stake in online jeweler

Published: 19 April 2000 y., Wednesday
Citing competitive pressures, the company declined to say how much it raised. Blue Nile plans to use the money to build its brand, improve its infrastructure and expand its product offerings, company chief executive Mark Vadon said. Paul Allen's Vulcan Ventures led the investment round. Previous Blue Nile investors Bessemer Venture Partners, Trinity Ventures, Kleiner Perkins Caufield & Byers, Weiss Peck & Greer Venture Partners, and Integral Capital Partners also participated in the round. Competition in the online luxury goods market has been growing in recent months. Amazon.com entered the niche in December with its $10 million investment in Ashford.com. Meanwhile prominent venture capital companies such as Sequoia Capital, CMGI @Ventures, and Idealab have backed a slew of luxury goods sites. Unlike books, toys or groceries that are often sold at a discount to price-conscious consumers, retailers often sell luxury goods such as jewelry, diamonds and fine pens far above their cost. And the market for such goods is larger than that for books or music. Analysts estimate that the diamond jewelry market alone is $30 billion in the United States. But the market poses significant challenges online. Few consumers may be willing to spend hundreds or thousands of dollars to buy jewelry and other luxury goods without seeing the items first.
Šaltinis: CNET News.com
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