Zomato Paytm Acquisition: Zomato announced the acquisition of Paytm’s entertainment and ticketing business for Rs 2,048.4 crore to strengthen its presence in the lifestyle business. The deal, which was done on an all-cash basis, was approved by the boards of both companies on August 21 and could be a giant step for Zomato as it looks to diversify its business beyond the core food delivery operations.The acquisition occurs in the context of Zomato Recently, Zomato launched ‘District’, a new app that seeks to bundle different ‘going out’ services such as restaurants or ticketing services for movies or events. It captures Zomato’s vision of diversifying the offering into lifestyle services such as ticketing for sporting events, live shows or staycations, all under one umbrella.The cash proceeds from the sale are likely to strengthen Paytm’s balance sheet and further its long-term value creation strategy.Industry experts have called this acquisition a strategic move for Zomatoespecially considering that the growth of the food delivery business was already maturing. Now that the high-growth phase of the food delivery business is seemingly over, Zomato’s investment in the entertainment business could become the driver of revenue growth in the long term. Brokerage estimates indicate that the acquisition is likely to add around 2.5 per cent to Zomato’s consolidated revenue initially.Sreedhar Prasad, former partner at venture capital firm Kalaari, said: “What? Zomato “What it has acquired is not ticket sales, but capturing a larger share of consumer spending in the lifestyle category, a segment it already has a presence in,” he stressed. He therefore stressed that Zomato’s platform could improve the discoverability of entertainment options, something that is currently lacking in traditional ticketing platforms.According to Karan Taurani, senior analyst at Elara Capital, it is an online ticketing market where companies like BookMyShow and Paytm contribute about 90 per cent of multiplex bookings. Zomato It would leverage its existing user base to drive better visibility for these events and capture revenue in the form of value-added ticket offers and sponsorships.
Zomato Live, the company’s foray into the events sector, has already shown promise, with 190,000 tickets sold and revenues of Rs 52.9 crore in FY23. Given the rapid growth of the live events and ticketing market in India (driven by rising uptake of live events in tier-2 cities and rising per capita income), Zomato is well-positioned to benefit from this growth with the acquisition of Paytm’s event ticketing business.
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