Zomato Acquires Paytm’s Movie Ticketing and Events Business for ₹2,048 Crore in All-Cash Deal

In a strategic move to diversify beyond food delivery, Zomato has announced its acquisition of Paytm’s movie ticketing and events business for ₹2,048 crore in an all-cash deal. This acquisition marks a significant expansion into the “going-out” sector, further solidifying Zomato's position in the entertainment space. The deal comes as Zomato looks to bolster its business verticals following its aggressive foray into quick commerce with the Blinkit acquisition in 2022.

Strengthening the Going-Out Business

Zomato’s acquisition includes Paytm Insider, a platform that provides services for movie ticketing and live events. The acquisition aligns with Zomato’s broader strategy to invest in its growing "going-out" business, which encompasses dining out, live events, and entertainment. Zomato had previously hosted US musician Post Malone’s India tour in December 2022, highlighting its commitment to this sector.

The company recently launched an app called District, focusing on the going-out business, which will now become its third major business-to-consumer vertical after food delivery and quick commerce. This acquisition is seen as the next growth pillar for Zomato as the food delivery business faces market saturation.

Transfer of Assets and Employees

Under the agreement, Paytm will transfer its entertainment ticketing business to its wholly owned subsidiaries, Orbgen Technologies (which runs TicketNew) and Wasteland Entertainment (which operates the Insider platform). Zomato will acquire the entire stake in these subsidiaries, along with nearly 280 employees. Despite the transition, ticketing services will remain available on the Paytm app for up to 12 months to ensure a seamless experience for users and merchant partners.

Zomato's Growing Entertainment Business

Zomato's going-out business has been thriving, reporting a gross order value of ₹1,268 crore for the April-June quarter of 2023, up 106% from the previous year. In June, Zomato’s board approved a ₹100 crore investment in Zomato Entertainment Pvt Ltd, which manages live events and ticketing businesses. The company also appointed Zeenah Vilcassim as CEO of Zomato Live Entertainment to spearhead its growth in this sector. UBS recently valued Zomato’s going-out business at $1.6 billion, underscoring its significant market potential.

Paytm’s Strategic Shift

For Paytm, the sale of its entertainment ticketing business represents a strategic shift to focus on its core areas. The business, built from the ground up and bolstered by the acquisitions of TicketNew and Insider between 2017 and 2018 for ₹268 crore, generated ₹297 crore in revenue and ₹29 crore in adjusted EBITDA for fiscal 2024. Paytm reported total revenue of ₹10,524 crore and a net loss of ₹1,422 crore for FY24.

Deal Advisory and Future Prospects

The acquisition deal, expected to close within this quarter, was advised by Deloitte India, Morgan Stanley, and law firm Luthra & Luthra on Paytm’s behalf. The transaction was announced after market hours, with Paytm shares closing nearly flat at ₹573 on the BSE and Zomato ending 1.16% lower at ₹259.95.

As Zomato strengthens its foothold in the entertainment sector, this acquisition could pave the way for further growth, helping the company tap into new revenue streams and enhance its market presence.