Zomato has made a bold move to diversify its business by acquiring Paytm Insider, the entertainment and events ticketing arm of One 97 Communications Limited (OCL), for Rs 2,048.4 crore.
This acquisition marks a significant step in Zomato's strategy to expand beyond its core food delivery and dining services and tap into the entertainment sector. The deal, approved by Zomato's board, will see the food delivery giant venture into the entertainment ticketing market, further broadening its service offerings.
In a regulatory filing made on Wednesday, Zomato provided detailed information about its agreement to enter into a Share Purchase and Subscription Agreement (SPSA) with OCL, Wasteland Entertainment Private Limited (WEPL), and Orbgen Technologies Private Limited (OTPL) to facilitate the acquisition.
The transaction involves a series of intricate steps. One 97 Communications Limited (OCL) will first transfer its movie, sports, and events ticketing businesses to its subsidiaries, OTPL and WEPL, through a slump sale.
Following this, OCL will infuse capital into these subsidiaries via preferential allotment, utilizing the funds to cover the payment for the slump sale. Concurrently, Zomato will acquire OCL's entire stake in both OTPL and WEPL, effectively transforming these entities into wholly owned subsidiaries of Zomato.
The acquisition is expected to be finalized within 90 days of signing the SPSA, with OTPL’s acquisition valued at Rs 1,264.6 crore and WEPL’s at Rs 783.8 crore. This strategic acquisition allows Zomato to extend its reach into the entertainment sector, complementing its existing services and diversifying its revenue streams.
Zomato's foray into the entertainment ticketing industry is aligned with its broader strategy to enhance its "Going-out" business—a segment the company sees as a critical growth area.
By integrating entertainment ticketing with its dining and food delivery services, Zomato aims to create a more comprehensive offering for its users, thereby strengthening its position in India's rapidly evolving consumer market.
OTPL, which has been operational since 2007, specializes in movie ticket listings and had a turnover of Rs 13.14 crore as of March 31, 2024. WEPL, which entered the market in 2015, focuses on event ticketing and recorded a turnover of Rs 236.03 crore over the same period. These figures underscore the potential of these businesses to contribute significantly to Zomato's growth.
Zomato's expansion into the ticketing market comes on the heels of the launch of 'District,' a new app designed to consolidate its "Going-out" offerings. Deepinder Goyal, Zomato's Founder and CEO, highlighted the company's vision, stating, "We believe that there is an opportunity to further expand our going-out offering, building on top of our dining-out business. Additional use cases for customers in the going-out space include – movies, sports ticketing, live performances, shopping, staycations etc."
This acquisition also builds on reports from June 2024, when Zomato initially expressed interest in acquiring Paytm's movies and events businesses. At the time, the company indicated that this move would bolster its "going-out" segment and align with its strategy to focus on its four core businesses.
Paytm Insider's integration into Zomato’s ecosystem is expected to provide users with a seamless experience that blends food, entertainment, and lifestyle into one unified platform. Paytm, in a light-hearted social media post, welcomed Zomato to the entertainment sector, marking the beginning of a new chapter for both companies.
This acquisition is a testament to Zomato's commitment to innovation and growth, as it continues to evolve from a food delivery service to a comprehensive lifestyle platform. By entering the entertainment ticketing market, Zomato is poised to strengthen its grip on India's fast-evolving consumer space, offering a holistic experience that caters to the diverse needs of its users.