For $244 Million, Zomato Purchased Out Paytm’s Entertainment Ticketing Division

Nitin Konde, Apoorva Bajj

Aug 23, 2024 — 2 min read

For $244 Million, Zomato Purchased Out Paytm’s Entertainment Ticketing Division

Zomato, a platform for foodtech and rapid commerce, is going to buy out Paytm's movie and ticketing division. The deal has been in the works between the two businesses for three months now. Following Blinkit in June 2022, this is the first significant acquisition for the Gurugram-based startup.

An announcement was made to the Bombay Stock Exchange (BSE) stating that Zomato has agreed to purchase Paytm's entertainment ticketing business for INR 2,048 crore (about $244 million) in cash.

Details of the Deal

Zomato will receive full ownership of Orbgen Technologies (TicketNew) and Wasteland Entertainment (Insider), two subsidiaries of Paytm's parent company One97 Communications, according to the terms of the agreement.

Along with the two subsidiaries, 280 current employees from TicketNew and Insider will also be a part of the agreement. Paytm, which is headed by Vijay Shekhar Sharma, purchased Insider in May 2017 and TicketNew in 2018 for a total of $40 million.

In FY24, the company reportedly made INR 297 crore in sales and INR 29 crore in adjusted EBITDA.

During the transition time of up to 12 months, the entertainment ticketing business—which includes movie, sports, and live event ticketing—will continue to function on the Paytm app. Assuming all agreements are met, the transaction is anticipated to finalise this quarter.

Why Zomato So Keen About This Acquisition?

As per market experts, the last quarterly results showed a fall in gross order value, which is bad news for stock market investors because it indicates that the Zomato's primary food sector is slowing down, even though the reduction was small. Although some may see the decline as a temporary setback, others worry that the meal delivery sector is reaching its peak as it expands into more and more locations.

Therefore, many analysts and broking companies expect Blinkit, Zomato's quick-commerce branch, to surpass Zomato's primary meal delivery operation, and industry observers' attention has recently shifted to Blinkit.

They should be able to satisfy investors' appetite for growth with Zomato's main food company making profits and Blinkit offering growth, right? Yeah, but that's only for today.

It is unclear if Blinkit will be able to sustain Zomato's growth in the future, even though it is currently driving it. This is because it is unclear if quick-commerce will gain traction in tier-2 and tier-3 cities after they have penetrating metro cities to their full potential.

So, for Zomato to continue its growth trajectory in the future, it needs a fourth engine, in addition to its online food ordering, Hyperpure by Zomato, and Blinkit industries. One possible candidate for the fourth engine is Zomato's "Going-out" vertical, which includes eating and live events. This makes this deal a perfect combination for Zomato, considering its future growth.