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Diamond Foundry makes high-end diamonds in a lab

Silicon Valley is crowded with app creators, software developers and coders, but one start-up could theoretically shine a bit brighter than the rest.

The Diamond Foundry was created by Martin Roscheisen, founder of solar power company Nanosolar. After that company folded in 2013, Roscheisen gathered the same team to come up with a proprietary discovery that can grow diamonds more efficiently than existing technologies.

Not murky, synthetic diamonds, but clear, white gems that are atomically identical to diamonds mined from the earth.

Plasma Diamond Foundry
Source: Diamond Foundry

"With our experience in solar manufacturing, our team started looking around at what other industries were there where we could make a difference," said Roscheisen. "The diamond industry occurred to us as a very traditional industry, characterized by human rights issues, child labor, all really terrible things and no one was really trying to change the industry,"

After a few years of failed experiments, the team finally made a breakthrough.

The Diamond Foundry starts with a sliver of an earth-mined diamond. That seed diamond is then heated to temperatures as hot as the outer layer of the sun. Layers of identical crystal atoms stack on top of the diamond, and it can grow up to nine carats in two weeks of uninterrupted time in the reactor.

The start-up partnered with jewelry designers to sell its diamonds in an online marketplace. Roscheisen said the company will eventually expand to brick and mortar.

Christine Guibara, one of Diamond Foundry's jewelers, said she can't tell the difference between natural diamonds and Diamond Foundry's lab-produced gems. She said that some of her clients actually prefer lab-made diamonds.

"Now that Diamond Foundry exists, it's great," Guibara said. "If someone is looking for something eco-friendly, I now have a reliable option for them."

Looking at a diamond
Getty Images

There are many other lab-made options out there. Even DeBeers produces diamonds in a lab. But only a handful of companies create diamonds that are white and clear enough for jewelry.

Investors have taken notice. The company, which publically launched in November, has raised about $100 million so far. Actor Leonardo DiCaprio, who incidentally starred in the 2006 drama "Blood Diamond," invested in Diamond Foundry along with Twitter and Medium founder Evan Williams, Facebook founder Andrew McCollum, Zynga founder Mark Pincus, former eBay President Jeff Skoll, and SUN Microsystems founder Andy Bechtolsheim, to name a few.

"There is nothing special about Diamond Foundry with the exception that one of their investors is DiCaprio," said diamond industry analyst Edahn Golan. "They are doing, in many ways, something that has been done since the 1950s."

Golan's fear is that the industry could suffer if more lab-made diamonds flood the market, especially as advances in technology bring the cost down.

But for now, Diamond Foundry has no plans to lower its price.

"Our diamonds are extremely rare on the global scale. And it is a 100 percent ethical eco diamond, so it's basically a premium value," said Roscheisen. "Our product sells right now at a somewhat higher level than mined diamonds just because people appreciate the origins and because it's really limited edition right now."

In fact, they are almost sold out of their first batch of inventory, Roscheisen said.

"There is a growing consumer demand for more environmentally friendly mining and process. That's why Leo and others invested in this business," said diamond analyst John Vardis. "However, in my experience in dealing with high-end clients, when faced with choosing between a real diamond and man made, they feel more comfortable with the earth-mined diamond because their perception is that it's more real."