In a letter to shareholders, Goyal said: “From a human perspective, this acquisition is our first major acquisition where we acquired a team that we don’t know very well (in the Uber Eats acquisition we didn’t acquire any team and in Blinkit we knew the founder and team very well).”
Zomato acquired Uber Eats India in 2020 in an all-stock deal. He acquired fast-trading platform Blinkit in 2021 for $570 million.
“This time we are betting much more on the team and we hope that everything goes well. The main factor for success will be the cultural integration of the new team that joins us, that is, the assimilation of the new team to our culture of flat teams,” he added.
As part of the acquisition, Zomato 280 employees will be hired from the organisations to be acquired. The cash acquisition worth Rs 2,048 crore was announced on Wednesday evening.
Customer transition
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Goyal said that initially the services offered in the various apps will remain as they are now. These include apps like Zomato, Online paymentInsider and TicketNew. Over time, Zomato’s proposed new app, called District, will start offering these services, and there will be a duplication to start with. The various offerings include restaurants, live events, event ticketing, sports, and cinema.
The district will be launched in the coming weeks.
“In terms of traffic redirection, we are pretty confident that we will be able to achieve this; this requires high-intensity muscle execution (for which we have hired Rahul Ganjoo and Pradyot Ghate, two Zomans who were instrumental in making the transition to Uber Eats work),” Goyal said.
He also said the company may need to incentivize customers to move from older apps to District, “but that’s simply a marginal financial risk for now, which we will try to eliminate as much as possible.”
Long-term opportunity
In terms of the potential scale and margins of the new business, Goyal said it would depend on the incremental use cases the company can build on top of what it has and is acquiring.
““Post this acquisition, the gross order value for FY26 (first full financial year after acquisition) is expected to be over Rs 10,000 crore (and growing rapidly). Any further change in scale here will depend on our ability to develop new use cases like shopping, staycations (travel), etc,” he said.
“We believe that over the next decade and beyond, check-out experiences will continue to grow strongly in line with overall lifestyle and consumption growth. The proposed acquisition helps us add further scale and offer new use cases (such as movie and sporting event tickets) to our customers in this segment,” he added.
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