Benny Landa's synthetic diamond company facing insolvency
Benny Landa's synthetic diamond company facing insolvency
Lusix, a company that manufactures lab-grown diamonds, has informed its creditors of its intention to file for insolvency, after unsuccessfully seeking a $15-million cash injection from shareholders.
Lusix, Benny Landa's synthetic diamond company, is on the verge of filing for insolvency. The company informed its creditors of its intention to do so but did not specify the exact timing. Calcalist has also learned that the company informed its shareholders last week that it urgently needs to raise $15 million for ongoing operations and that without this capital infusion it would become insolvent. Despite some investors considering injecting additional funds, this is not believed to have occurred.
Lusix, like the entire market, has suffered from a steep drop in the prices of synthetic diamond raw materials. The price drop from $300 to $30 per carat over several years has led to the closure of several companies worldwide that struggled to cope with the crisis, all while the consumer price of lab-grown diamonds has barely changed.
Lusix, founded in 2016 by Landa, who sold digital printing company Indigo to HP in 2002 for $830 million, produces laboratory-grown rough diamonds, also known as synthetic diamonds. They are sold to polishers who transform them into processed diamonds used by various jewelry companies. Laboratory diamonds offer an environmentally friendly alternative to natural diamonds mined from the ground, often associated with environmental pollution and human rights issues, earning the term "blood diamonds" if mined in certain parts of the world.
Landa, who serves as the chairman of Lusix, has invested about $60 million of his personal wealth in funding the company over the years and singlehandedly financed the company until mid-2022. Other shareholders include the More Investment House and the Ragnar Crossover Fund, but the most prominent shareholder is fashion giant LVHM, which led a $90 million funding round in 2022.
At the end of 2023, the company raised $15 million based on a valuation of only $50 million, which has sustained it until now. Lusix, which operates out of Rehovot, hopes to transition to producing polished diamonds as well, in an effort to save the company.
Benny Landa owns Landa Digital Printing, a 3D printing company that raised funds at a valuation worth billions of dollars, and his wealth is still estimated to be over a billion dollars today. The fact that Lusix has reached the end of its road indicates that he has given up on the vision of producing synthetic diamonds.
