Zomato to buy out Paytm’s entertainment, ticketing business for Rs 2,048 crore. This will further enhance Zomato’s move to create a strong presence in the ‘going-out’ segment while, on the other hand, Paytm makes an effort to focus on its core financial services amid troubled times.
Both Zomato and Paytm informed the exchanges on Wednesday that the respective boards have approved of this transaction.
The agreement envisages transfer of the movie, sports and events ticketing business of One 97 Communications—the company behind the Paytm brand—to its wholly-owned subsidiaries Wasteland Entertainment Private Limited and Orbgen Technologies Private Limited respectively through a slump sale. During the transition period of up to 12 months, Paytm will continue to offer these ticketing services. However, users will be redirected to an in-app prompt to shift them to Zomato’s upcoming app, which is their ‘going-out’ segment. To drive this habit, there will be incentives for customers to use the new app called ‘District’.
Earlier this month, Zomato launched ‘District’, an app that will bring its going out business comprising dining and ticketing for movies and events into a single fold—a rather ambitious expansion beyond core food delivery and hyper commerce services. The app is expected to go live for public use in the coming weeks.
According to the Paytm filing, its entertainment ticketing business recorded consolidated revenue of Rs 297 crore and adjusted EBITDA of Rs 29 crore in FY24. In sum, it clocked a total gross order value in excess of Rs 2,000 crore, a growth of 29% year on year. The platform saw the sale of 78 million tickets to more than 10 million unique customers.
On the other hand, according to Zomato, going-out verticals—dining out and event ticketing—increased by 136% YoY with GOV of INR 3,225 crore in FY24.
“This is not really an absolutely new business for us as we have been doing ticketing as a business for over a year now and have been eyeing building more use-cases for that business. It never gets spoken about much given all the attention food delivery and quick commerce gets, but this is already a profitable and large business for us,” said Deepinder Goyal, CEO, Zomato.
As part of the deal, close to 280 employees are likely to move to Zomato.
“On the people side, this acquisition is our first major acquisition where we are acquiring a team that we do not know very well (in Uber Eats acquisition we did not acquire any team and in Blinkit we knew the founder and team really well). We are betting on the team much more this time and hoping everything works out well. The main driver of success is going to be cultural integration of the new team that will join us – which means assimilation of the new team into our flattish culture,” Goyal said.
