Naaptol dilutes 15% stake against Rs 343 crore investment from Mitsui & Co

Multi-channel home shopping platform Naaptol has raised Rs 343 crore in a new round of equity funding from Japanese conglomerate Mitsui & Co. With this cash infusion, Mitsui & Co’s stake in Naaptol increases from five percent to 20 percent. Earlier, the company had secured Rs. 136 crore in its Series C round in April this year.

Currently, Naaptol claims to have reach to 160 million TV households in India on a daily basis. The company plays over 350 hours of commercials every day in multiple languages. It also has an online channel, but a large chunk of business comes from TV and print channels.

Naaptol operates in nine regional languages and claims to ship 20,000 orders on a daily basis. Importantly, Mitsui is an active investor in TV commerce in Asia. It has invested in Japanese TV shopping retailer QVC Japan as well as home shopping networks in China, Taiwan, and Japan.

Manu Agarwal, Founder and CEO of Naaptol said, “The company intends to use the funds for expanding its reach and building an efficient supply chain. We would also upgrade our studio capabilities to churn out more and more content in multiple languages every day and invest in technology. We are at an inflection point where transformational use of technology and expertise will define our future. This fund raise comes at an exciting time for us.”

YourStory’s take

According to some industry estimates, TV commerce processes Rs 15-20 crore worth orders in a day, and the market size stands close to Rs 1,300-1500 crore on a commissions revenue basis with a growth rate of 60-70 percent annually.

Television commerce is observably different from web commerce. Moreover, it’s a function of reach while web commerce relies heavily on marketing. With this round, the company will expand aggressively in smaller cities. Currently, HomeShop18 is leading the industry followed by StarCJ, Naaptol, TVC SkyShop, and Snapdeal-DEN Network.

Naaptol competes with aforementioned platforms. According to a media report, the company is targeting commission revenue of Rs 530 crore (net revenue not gross) for fiscal 2016. It’s also expected to turn profitable by the end of current fiscal. The battle for the TV commerce crown is intensifying and it would be interesting to watch how Naaptol, Star CJ, Snapdeal-DEN Networks compete with the mighty HS18.