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Zomato to buy Paytm’s ticketing events business for $240 million
The deal includes a transition services agreement, where the ticketing business will continue to run on Paytm app for 12 months to ensure a smooth transition
![Zomato to buy Paytm’s ticketing events business for $240 million Zomato to buy Paytm’s ticketing events business for $240 million](https://pressinsider.com/wp-content/uploads/2024/08/Paytm-Insider.jpg)
Food delivery platform Zomato has agreed to buy fintech firm Paytm’s entertainment ticketing business in a deal valued at ₹2,048 crore (about $240 million), the companies informed the stock exchanges after market hours on Wednesday.
Shares of Zomato Ltd declined nearly 1% to ₹257.85 at close on Thursday, while those of One 97 Communications Ltd, the company which runs and operates Paytm, slid 3.14% to ₹556.
In FY24, Paytm’s entertainment ticketing business generated a combined gross order value of more than ₹2,000 crore, which grew 29% year-on-year (y-o-y) as the platform sold 78 million tickets to more than 10 million unique customers, Zomato said.
In the same period, the business generated a revenue of ₹297 crore and an adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of ₹29 crore, which translate to about 1.5% adjusted Ebitda margin as a share of gross order value, the company said. Ebitda is a measure of profitability.
Zomato already operates its food delivery business and quick commerce (Blinkit), and doesn’t have plans to make any immediate changes to the operations at the new vertical.
“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. Our going-out business, which includes dining-out and event ticketing, did ₹3,225 crore of gross order value in FY24, growing at 136% y-o-y,” Zomato said.
The deal includes a transition services agreement, where the ticketing business will continue to run on the Paytm app for a period of up to 12 months to ensure a smooth transition.
“As part of the transaction, about 280 employees will move to Zomato. There is no other major physical infrastructure being acquired,” the company said in a statement.
Eventually, the food delivery-cum-quick commerce firm plans to spin off the ticketing business into a separate app.
“The proposed acquisition helps us add more scale and offer newer use-cases such as movie and sports ticketing to our customers in this segment. It makes us more relevant for our customers, which also gives us an opportunity to spin off the business into a new app. We are going to call it District–our dedicated going out app,” Zomato chief executive officer Deepinder Goyal said, adding that the company plans to launch the District app in the next few weeks.
Post this acquisition, the going-out business would be spread across multiple platforms, Goyal said.
“Zomato’s existing going-out business (dining-out + event ticketing) would continue to run on Zomato and the acquired business (movie + sports + event ticketing) would continue to run on Paytm, along with Insider and TicketNew apps (which would get transferred to Zomato as part of the deal),” Goyal said.
“In the short term, District app will duplicate the offerings above and, over time, we will gradually nudge our customers to move from the Zomato/Paytm/Insider/ TicketNew apps to the District app. Eventually, there will just be a button to launch the District app on the Zomato app,” he added.