Scio Diamond Technology Corporation closed $2.5 million in growth funding from Heritage Gemstone Investors (HGI). It intends to employ the funds to double production of its lab-grown diamonds and refinance debt. Scio will refinance a $1.5 million loan from Platinum Capital Partners at more favorable terms, reducing its borrowing costs by more than 10 percent. To double its capacity it will purchase additional production platforms in a larger size.

Scio and HGI have agreed on terms for a second phase of funding from HGI in 2015, for increasing the company’s production capacity by up to 10 times.

“Our growth strategy is designed to take advantage of both near-term and future market opportunities that we believe will make Scio Diamond the leader in lab-grown diamonds,” said Gerald McGuire, President and CEO, Scio Diamond. “Our investors and board members believe strongly that lab-grown diamonds are a promising growth market. These investments illustrate the high level of confidence that they have in Scio’s management team and business plan.”

Two Scio Diamond board members, Bruce Likly and Lewis Smoak, have raised their equity investment, following investments made in the company in October and board member Karl Leaverton invested in the company in December.

Vivian Wong from HGI mentioned, “We believe the company is well-positioned to be a major factor in expanding the market for lab-grown diamonds.”

In 2014, SCIO named a new board of directors, hired a new executive team and developed a new business plan. The company added “fancy” colored diamonds to its product lineup, along with colorless stones for jewelers and cutting devices and electronics for manufacturers. In its fiscal year ending March 31, 2014, the company increased net revenue by more than $500,000 over 2013. The company reduced operating expenses from $8.1 million to $5.6 million from 2013 to 2014.