Israeli blockchain startup Carats.io, which is issuing the first digital coin backed by diamonds, has announced that it has received $1.6 million in its first funding round led by Net Capital Ventures, an Israeli venture capital fund.

The company has entered into a partnership with the Israel Diamond Exchange for this venture.

Last month, carats.io commenced pre-sale of CARAT tokens, for the digital coin. These are 100% redeemable for diamonds is currently in presale.

The company reports that they are registering large subscriptions for the token through the company website. Carats.io executive team has just completed a road show in Asian capitals - Hong Kong, Singapore, Korea and Japan - for a private sale of the CARAT token. The company reports outstanding results for the private sale.

According to CEO Avishai Shoushan, Carats.io is creating the first-ever viable secondary market for diamond commerce, combining the stability of diamonds with the liquidity of cryptocurrency. “We are bringing diamonds – the world’s most precious commodity – to financial markets as a safe, transparent and liquid financial asset,” he said.

International accounting firm Ernst & Young is auditing the diamonds backup ratio of the CARAT tokens.

Carats.io uses state-of-the-art Big Data and blockchain technologies to tokenize diamonds. The company has created the Diamond Pricing Algorithm (DPA) which compares individual diamond grades to daily market conditions, based on not less than 14 diamond parameters. It has been deployed so far on over $11 billion worth of diamonds. It has also created the Get-Diamond Index (GDX), the first diamond market index of its kind, based on the daily diamond trading data within the IDE.