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Wednesday, April 29, 2015

Naaptol Online Shopping raises Rs 136 crore from Mitsui & Co

NEW DELHI: Naaptol Online Shopping, which owns and operates TV shopping and ecommerce platform Naaptol.com, has raised Rs 136 crore from Japanese conglomerate Mitsui & Co, the latest example of global investors continuing to back Indian online retailers.

Existing backers New Enterprise Associates, Canaan Partners and Silicon Valley Bank also participated in Naaptol's Series C or third round of institutional funding, which closed last month. The Mumbai-headquartered firm will use the money for expansion.


"We are already in 24/7 format across languages, and in this fiscal, we hope to be the largest home shopping network in India," said Manu Agarwal, founder and chief executive of Naaptol.

While Agarwal did not disclose exact stake sold to Mitsui, dilution is believed to be in single-digit percentage points. Investment bank Jefferies India was the financial adviser in the transaction.

Mitsui owns a sizeable stake in Japanese TV shopping retailer QVC Japan as well as home shopping networks in China and Japan. Naaptol competes with Reliance-owned HomeShop18, the country's largest TV shopping firm, as well as with TVC SkyShop and StarCJ. "Automation of our supply chain is also right on top of our agenda. We will be focusing on doing more creatives across more products," said Agarwal.

Naaptol is targeting commission revenue - which is net revenue, not gross - ofRs 530 crore for fiscal 2016, a 54% increase over its 2014-15 revenue. "We're not losing a significant amount of money, and expect to get into profitability by the end of this (financial) year," Agarwal said. The company derives about 85% of revenue from television, which it expects to grow to 90% this fiscal.

Indian home shopping grew by 6% in 2013 to Rs 1,210 crore last year, according to market research firm Euromonitor.

In June last year, global private equity firm Providence received approvals from the Foreign Investment Promotion Board (FIPB), the regulatory agency mandated to clear foreign direct investments in the country, to buy out Star Group's 50% stake in home shopping network StarCJ for an estimatedRs 300 crore.

Prior to the latest round of funding, Naaptol had raised $38.5 million from its existing investors. Institutional investors now hold a majority stake in the seven-year-old company, which sells a variety of products, including apparel, consumer electronics, home furnishings and kitchen appliances.

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