Diamonds are for Rabbis: and Its Founders Heat Up with $47 Million From Polaris and Ignition

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he says. “It was a funny sight.” (For more on the Pasadena days and Ice’s history, check out this 2002 Fortune article.)

A few months later, the business was renamed And a few months after that, the whole thing came apart. Gross’s idea, says Gniwisch, was to roll up Ice and some of his other e-tail ventures (including eToys and CarsDirect) into a mega-Web retailing site called and take on Amazon head on. But not long into the venture—in October 2000—Gross pulled the plug. Ice was sitting on about $600,000 in debt. The brothers (and brother-in-law) negotiated to buy back the business for the amount owed and, says Gniwisch, “started building from scratch.”

After all, he says, they had a great URL and a dedicated team, and it wasn’t long before they moved into the black. “We were profitable. Not highly profitable, but we were profitable,” says Gniwisch. Two years ago, back on solid ground, the new Ice took on its first new funding—$12.5 million from Ignition.

Since then, the company has grown its sales and bought up, another online jewelry retailer that was winding down before Ice snatched it up. This business, which focuses on slightly higher-end jewelry than Ice–chiefly in the $300-$1000 range—now represents perhaps a third of Ice’s business. “We’ve been building that brand back to life. We did phenomenal with that brand this [past] year,” says Gniwisch.

Which brings us back to the new funding round, which will give Polaris managing general partner Alan Spoon a seat on Ice’s board. This kind of large investment in what by today’s standards is a pretty standard retail operation might seem a bit unusual for a cutting edge, high-tech, and life sciences-oriented firm like Polaris. But Ice is an Internet-based business, and its profitability and well-established brand makes it far less of a risk for investors than most startups, justifying the big bucks investment. In fact, Polaris has a long line of such later-stage, “growth equity” investments in more established Internet retail or e-commerce brands, which include, e-Rewards, LegalZoom, UltraShape, and TechTarget (which went public last year).

“The idea of raising the $47 million was to take the business to the next level,” says Gniwisch (who definitely likes to round up). All told, the company’s 2007 revenues were around $83.4 million, according to press materials. And Gniwisch says his plan is to drive revenues past $100 million, by moving the same products to more customers. That will mean opening other marketing venues and potentially expanding to other geographic areas (almost all the firm’s sales are in the U.S. right now, with only a few percent in its home base of Canada). “The market is so ripe to be taken,” says Gniwisch, who points out that Zales, the largest offline jewelry retailer, outsources its e-commerce operations. “We’re not even scratching the surface.”

Scratching surfaces? Diamonds? Surely, the rabbis have more to mine before this script is finished.

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