Zomato Enters Entertainment Ticketing with Paytm Insider Acquisition

Zomato has made a significant strategic acquisition of Paytm Insider, the event ticketing subsidiary of One97 Communications Limited (OCL), for a total of Rs 2048.4 crore. This signals the company's entry into the entertainment ticketing sector. With this acquisition, Zomato's business model is diversified and its influence in the 'going-out' culture is greatly increased, as dining, entertainment, and leisure activities are successfully combined into a single, all-inclusive platform.

Through its platform, the company successfully sold 190,000 tickets in FY23, bringing in ₹52.9 crore in income.

According to Elara Capital, India's live events and ticketing sector is expected to experience robust double-digit growth due to a number of factors, including rising per capita income, the popularity of live events in Tier II cities, higher ticket prices, the emergence of new sports leagues like the WPL, PKL, and ISL, and international events like Lollapalooza.

Paytm spokesperson said, "We built the entertainment ticketing business by addressing the mark needs of the time. Today, as it transitions to Zomato ownership, we thank every team member wh contributed to building this business. It has been a privilege to grow this business with an incredible team. This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders."

Details of the Acquisition

The board of Zomato approved the transaction which involves a Share Purchase and Subscription Agreement (SPSA) with OCL, along with its subsidiaries Wasteland Entertainment Private Limited (WEPL) and Orbgen Technologies Private Limited (OTPL). Structurally, OCL will transfer its movie, sports, and event ticketing businesses to OTPL and WEPL through a slump sale. Following this, OCL will funnel capital into these subsidiaries via preferential allotment to settle the slump sale payment. Finally, Zomato will acquire OCL’s entire stakes in both OTPL and WEPL, transforming them into wholly owned subsidiaries of Zomato.

This complex acquisition is slated to be finalized within 90 days from the signing of the SPSA, with the acquisitions of OTPL and WEPL valued at Rs 1,264.6 crore and Rs 783.8 crore respectively.

Zomato's entertainment ticketing initiative is expected to be a substantial expansion of its current offerings, in line with its strategic goal of strengthening its 'Going-out' business segment. These days, a variety of activities like movies, live events, shopping, and staycations are promised in this section.

The subsidiaries that are currently part of Zomato, OTPL and WEPL, are experts in movie and event ticketing, respectively. While WEPL, which has been in existence since 2015, focusses on event tickets and generated income of Rs 236.03 crore over the same period, OTPL, which has been in operation since 2007, has a niche in movie ticket listings with a turnover of Rs 13.14 crore as of March 31, 2024.

Synergising Food and Entertainment

The integration of Paytm Insider is timed with Zomato’s launch of 'District,' a new app aimed at consolidating its going-out offerings. This strategic move by Deepinder Goyal, Founder and CEO of Zomato, is designed to not only expand the company's services but to also enhance the user experience by combining dining-out with other lifestyle activities, thereby offering a holistic experience to customers.

From a business perspective, this acquisition opens avenues for Zomato to leverage the synergy between its food services and entertainment offerings. This integration could potentially enhance customer retention, increase average spend per user, and promote a higher frequency of app usage.

Conclusion:

Zomato's strategic move to create a holistic lifestyle platform that meets a range of customer demands and preferences is reflected in its daring foray into the entertainment tickets industry through the acquisition of Paytm Insider. This move goes beyond a simple service expansion. This action may set the standard for how tech and food-service businesses might work more closely with the entertainment sector to provide a smooth and enhanced consumer experience.

Zomato places itself at the forefront of a changing industry, promising exciting new developments for its stakeholders and customers alike as it keeps innovating and pushing the limits of what a food delivery and lifestyle platform can offer.

Also Read: