Japan's Mitsui invests Rs.343 crores in Naaptol
Home shopping company, Naaptol Online Shopping announced that it had again raised Rs.343 crore from Mitsui & Co, a Japanese conglomerate. This time's financing is a significant gain as it will enhance Mitsui & Co's stake in Naaptol from 5% to 20%. The group plans to utilize the fresh funds for extending "its reach and building up an efficient supply chain."
Naaptol the home shopping company based in Mumbai began in 2008 as a price comparison portal. It was founded by Manu Sharma with an initial seed capital of Rs.50 lakhs. By 2009, it morphed into an "online, print and television selling platform." Almost 70% of Naaptol's business comes from its television platform where it sells "everything from electronics to fashion accessories and lifestyle products."
After its tweak in its business model in 2009, Naaptol made a tenfold jump in its turnover from Rs.1 crore (2008-09) to Rs.10 crores (2009-10) after it started offering products to purchase online.
Maharashtra's revenue department moved against e-commerce platform Naaptol.com freezing its bank accounts to recover "value added tax (VAT) on the sale of third-party goods." Naaptol was asked to pay sales tax of over Rs.23 crore to tax department. Naaptol said ""under either of the Acts, namely Maharashtra Value Added Tax Act, 2002 and the Central Sales Tax Act, 1956", it wasn't liable to pay.
Naaptol raised Rs.136 crore in its three rounds of funding from Mitsui and Co. Ltd. Existing investors, New Enterprise Associates (NEA), Canaan Partners and Saama Capital also participated in the latest round. Naaptol was planning to invest this funding towards "upgrading its studios in Mumbai", and it would also work towards upgrading "systems and incorporate consumer analytics at its call centres".
Naaptol's technical head lodged a grievance against Suraj Singh, the former assistant Vice-President of the Naaptol website in the cyber crime cell. The police arrested two persons linked to the case. Sources have claimed that three other people who are involved are absconding. Suraj Singh has been accused of selling the source code of Naaptol website to create another shopping portal.