August 28, 2024
New Delhi, India
Zomato-Paytm
Food delivery giant Zomato has successfully completed the acquisition of Paytm’s subsidiaries Wasteland Entertainment Pvt Ltd (WEPL) and Orbgen Technologies Pvt Ltd (OTPL), marking a significant expansion into the entertainment ticketing business. The company disclosed this development in its recent filing with the stock exchanges.
Deal Overview:
- Acquisition Details: Zomato had entered into definitive agreements on August 21 to acquire Paytm’s entertainment arms, including the ticketing platforms TicketNew and Insider.
- Transaction Value: The deal is valued at ₹2,048 crore on a cash-free, debt-free basis and underscores the value Paytm has built in the entertainment ticketing segment, which serves millions of Indians.
- Employee Transition: Around 280 existing employees from Paytm’s entertainment ticketing business will transition to Zomato as part of the acquisition.
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Business Impact and Strategic Rationale:
- Expansion into Ticketing: The acquisition allows Zomato to broaden its scope beyond food delivery, adding new use cases like movie, sports, and event ticketing to its portfolio. Zomato CEO Deepinder Goyal highlighted the strategic value, noting that the deal enhances the company’s relevance for customers and opens up new opportunities in the entertainment sector.
- Transition Services Agreement: To ensure a seamless transfer, movie and event tickets will remain available on the Paytm app, as well as the TicketNew and Insider platforms, for up to 12 months during the transition period.
Future Plans:
- New App Launch: Zomato plans to spin off the acquired ticketing business into a new app called “District,” aiming to create a unified brand destination for entertainment ticketing, which could be a game-changer in the segment.
Paytm’s Focus Shift:
- Divesting Non-Core Assets: Paytm, which built its entertainment ticketing business through acquisitions like TicketNew and Insider for ₹268 crore between 2017 and 2018, decided to divest these assets to concentrate on its core payments and financial services distribution segments.
Zomato’s acquisition of Paytm’s entertainment ticketing business marks a pivotal expansion strategy, enhancing its service offerings while positioning the company to compete in the broader consumer tech ecosystem. The deal not only strengthens Zomato’s foothold in the entertainment sector but also reflects its commitment to continuously evolve and provide diverse, value-driven experiences for its customers.
Zomato shares are at Rs. 252.95 a piece at 2:44 IST.
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