The Ecommerce story is getting back in favour with VCs as US-based Canaan Partners is investing Rs 33 crore in Naaptol Online Shopping Pvt Ltd, an Indian online shopping company.

Mumbai based financial advisory firm Centrum Capital announced Friday that they have advised on the deal in which Canaan invested Rs 33 crore in Naaptol which includes fresh issue of shares and also acquisition of shares held by Bennett Coleman & Co. Ltd. The transaction involved substantial structuring including buy back of shares by the company from BCCL., followed by issue of fresh shares for Canaan, the statement said.

Naaptol, founded in April, 2008, is an e-commerce company selling a range of exclusive and non-exclusive products across multiple categories. Naaptol will use the funds to expand its operations to TV shopping, besides expanding its logistics footprint, sourcing exclusive merchandise and developing an "efficient" customer support.

An earlier report last week had said that Canaan is investing Rs 40 crore for a 25% stake in Naaptol. The report had said Naaptol plans to double its Rs 70 crore revenue to Rs 140 crore this year. Canaan Partners Managing Director and India head Alok Mittal had last week said the deal was speculative.

Canaan has backed several internet companies in India like classified firm Consim Info (which Bharat Matrimony), Bollywood portal Chakpak and B2B marketplace for used vehicles MotorExchange.

Online shopping (or non-physical) is gaining traction in India as a few companies in the space have shown. has already made a mark in selling books online, and has now diversified to other categories like mobile phones. Flipkart, which was seed funded by Accel Partners, recently raised capital from Tiger Global.

It's significant Naaptol is entering home shopping (TV) space too. This is one of the fastest growing segments as HomeShop18, a JV between SAIF Partners and TV18, has shown with the company registering significant revenue growth. In 2009, the company recorded Rs 22.7 crore revenues up from Rs 3.7 crore the previous year. The 2010 numbers are not available.

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