Zomato to acquire Paytm's entertainment and ticketing business for Rs 2,048 crore

Zomato is set to acquire Paytm's entertainment and ticketing business for Rs 2,048 crore. This move aligns with Zomato's strategy to strengthen its presence in the 'going-out' segment, while Paytm, facing challenges, plans to concentrate on its core financial services.

The transaction received approval from the boards of Zomato and Paytm on Wednesday, as both companies informed the exchanges.

As per the agreement, One 97 Communications, the parent company of the Paytm brand, will transfer its movie, sports and events ticketing business to its wholly-owned subsidiaries Wasteland Entertainment Private Limited (WEPL) and Orbgen Technologies Private Limited (OTPL), respectively, through a slump sale. During the transition period of up to 12 months, Paytm will continue offering the ticketing services. However, users will be redirected and prompted to transition to Zomato's upcoming app for the 'going-out' segment. To encourage this shift, Zomato will provide incentives for customers to use the new app, named 'District'.

Earlier this month, Zomato unveiled 'District', an app that will unify its going-out business, including dining and ticketing for movies and events. This marks an ambitious expansion beyond its core food delivery and hyper commerce services. The app is set to be available for public use in the coming weeks.

According to Paytm's filing, in FY24, the entertainment ticketing business achieved a combined revenue of Rs 297 crore and an adjusted EBITDA of Rs 29 crore. It generated a total gross order value (GOV) of over Rs 2,000 crore, reflecting a 29% year-over-year growth. The platform facilitated the purchase of 78 million tickets by more than 10 million unique customers.

Meanwhile, Zomato states that its going-out business (which includes dining-out and event ticketing) grew at 136% YoY, and did Rs 3,225 crore of GOV in FY24. 

"This is not really an absolutely new business for us as we have already been doing ticketing as a business for more than 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 get but this is already a profitable and large business for us," said Deepinder Goyal, CEO, Zomato.

As part of the transaction, approximately 280 employees will transition 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.