Zomato to Enhance Going-Out Segment with Paytm Ticketing Business Acquisition

Zomato is set to acquire Paytm's entertainment ticketing business for Rs 2,048 crore. This move aims to bolster Zomato's going-out segment while allowing Paytm to concentrate on its core payments and financial services. The acquisition includes movie, sports, and event ticketing.

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Paytm's entertainment ticketing business will be transferred to its subsidiaries, Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL). Zomato will then acquire these subsidiaries, which operate the TicketNew and Insider platforms. The deal has been approved by the boards of Zomato and One 97 Communications Ltd (OCL).

Focus on Core Business

Paytm stated that this transaction allows it to focus on its core areas of payments and financial services distribution. "This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders," a Paytm spokesperson said. The company remains confident in replacing the revenue from its entertainment ticketing business by expanding its core offerings.

The combined entertainment ticketing business generated Rs 297 crore in revenue and Rs 29 crore in adjusted EBITDA for FY24. Approximately 280 employees from the entertainment ticketing business will be transferred as part of the deal. Paytm highlighted that the transaction would generate significant profits and strengthen its balance sheet.

New App Launch

Zomato plans to spin off the newly acquired business into a new app called District. "We are going to call it District, which could be a game changer for each of these use cases given the need for a single brand as a destination in this segment," said Zomato Managing Director and CEO Deepinder Goyal.

Goyal added that District would be positioned as the go-to brand for consumers thinking of going out. The app is expected to launch in the next few weeks. During a transition period of up to 12 months, movie and event tickets will remain available on the Paytm app, TicketNew, and Insider platforms.

Details of Subsidiaries

OTPL was incorporated on November 23, 2007, in India, focusing on listing and selling movie tickets. It had a turnover of Rs 13.14 crore for the fiscal year ending March 31, 2024. WEPL, incorporated on December 21, 2015, deals with event ticketing and had a turnover of Rs 236.03 crore in FY24.

Zomato will acquire OTPL for Rs 1,264.6 crore and WEPL for Rs 783.8 crore. This acquisition will allow Zomato to offer new services like movie and sports ticketing to its customers.

Transition Period

During the transition period, both movie and event tickets will continue to be available on Paytm's main app as well as TicketNew and Insider platforms. This ensures a smooth experience for users and merchant partners.

Zomato's existing going-out business, including dining-out and event ticketing, will continue on the Zomato app. The newly acquired businesses will also run on Paytm’s main app during this period.

Eventually, Zomato plans to consolidate these services into the District app. "Once most customers start transacting on the District app, we will remove the duplication and shut down this business on all other apps," Goyal explained.

This acquisition underscores Paytm's success in building businesses and creating value for shareholders while allowing Zomato to expand its offerings in the going-out segment.