Food delivery giant led by Deepinder Goyal Zomato is acquiring the company led by Vijay Shekhar Sharma from Paytm show ticketing business worth Rs 2,048 crore (or approximately $244 million).
Paytm’s entertainment ticketing business includes ticket sales for movies, sports and events (live shows).
Paytm’s parent company to transfer its ticketing business to Zomato
As part of this agreement, OCL will transfer its entertainment ticketing business to Zomato through a two-step process. First, OCL will transfer its entertainment ticketing business to its wholly-owned subsidiaries, Orbgen Technologies Pvt Limited (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL).
Secondly, OCL will sell its 100% stake in these subsidiaries (OTPL, which operates the TicketNew platform, and WEPL, which operates the Insider platform) to Zomato.
The transfer will also include approximately 280 existing employees from the entertainment ticketing business who will be part of the transition to Zomato.
The transaction value is subject to cash and net working capital adjustments at closing. Closing of the transaction is subject to the satisfaction of agreed-upon conditions precedent, the major fintech company said in a filing with the stock exchange.
Why is Paytm selling its ticketing business?
Paytm is selling its entertainment ticketing business as it wants to focus on payments and financial services distribution business.
In recent quarters, the company has also expanded its offerings in insurance, equity brokerage and wealth distribution, with significant opportunity to cross-sell these services and increase its market presence as a leading player in financial services distribution.
Paytm said that for a transition period of up to 12 months, movie and event tickets will continue to be available on the Paytm app as well as TicketNew and Insider platforms.
“We built the entertainment ticketing business by addressing the needs of the market at the time. Today, as it transitions to Zomato, we thank all the team members who contributed to building this business. It has been a privilege to grow this business with an incredible team. This move allows us to continue to focus on long-term growth in our core areas and creating value for all stakeholders,” Paytm spokesperson said.
Financial performance of Paytm’s entertainment ticketing business
Paytm built its movie ticketing platform from scratch and acquired TicketNew and Insider for Rs 268 crore between 2017 and 2018.
The company made additional investments to further expand the business. The entertainment ticketing division achieved revenues of Rs 297 crore and adjusted EBITDA of Rs 29 crore in FY24.
The transaction is expected to close within this quarter, subject to satisfactory completion of all closing conditions, Paytm added.
CEO Deepinder Goyal highlights the reason for the acquisition
Zomato CEO Deepinder Goyal stressed that the acquisition is not entirely new territory for the company as it has been involved in ticketing services for over a year.
He said the inclusion of dining out and event ticketing has already shown significant growth, contributing Rs 3,225 crore to Zomato’s GOV in FY24, growing 136% YoY.
Zomato is looking to expand its relevance by integrating more use cases, such as ticketing for movies and sports, which will be included in a dedicated app called ‘District’, which the company plans to launch in the coming weeks.
According to Goyal, the new app is designed to specifically cater to the “going out” segment, a category that is still fragmented in India.
The company will focus on offering a one-stop solution for various entertainment needs including movie ticket booking, IPL tickets, restaurant reservations, live entertainment and more.
Building a super brand
Despite having a huge customer base with the Zomato app, Goyal said the decision to create a separate app, ‘District’, stems from the belief in building ‘super brands’ rather than ‘super apps’.
Zomato intends the new app to foster a unique brand association with entertainment and lifestyle activities, which could also improve customer loyalty, it said.
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