Zomato is set to pay 2,048 crore to acquire Paytms movie and events ticketing businesses, according to a BSE filing. This Paytm-Zomato deal will benefit Zomato in expanding its presence in the entertainment industry, while Paytm will refocus on its core banking services.  

In accordance with the agreement, Paytm will transfer its ticketing platforms, TicketNew and Insider, as well as 280 of its workers to Zomato. These assets, which Paytm paid 268 crore for in 2017 and 2018, now have a combined gross order value (GOV) of 2,000 crore for fiscal year 2024.  

Why did Paytm take this step? 

According to Paytm, this move enables them to focus more on their primary payment and financial services. 

One97 Communication Ltd (OCL) stated regarding the Paytm-Zomato Deal, The decision to sell off its entertainment tickets division highlights Paytms commitment to its core focus of processing payment and distributing financial services. Recently, Paytm has expanded into insurance, equity broking and wealth management, presenting substantial offers to cross-sell and strengthen its position in the financial services sector.  

This strategic shift allows us to focus on the long-term growth in our core areas and drive value creation for all stakeholder, a Paytm spokeswoman said in her statement.  

How will this deal help Zomato?  

The purchase is made at a time when Zomatos stock has increased by over 100% this year, driven by companys expanding quick commerce business in India. Analysts at Bank of America noted that this deal fits nicely with Zomatos broader strategy to diversify its offerings.  

They contend that Zomatos goal of becoming a full platform for eating and entertainment experiences could be significantly aided by the acquisition.  

Zomato CEO Deepinder Goyal stated, This isnt entirely new for us, as weve been involved in ticketing for over a year and have been looking to expand its use cases. To recap, our going-out business, encompassing both dining and event ticketing, has a 136% increase in GOV from the previous year to 3,225 crore in FY24.

Zomato to launch District 

Earlier this month, Zomato unveiled District, a new app that aims to combine its dining and movie and event tickets, to integrate its going-out division. In the upcoming weeks, this app will go live for everyone.  

While Paytm will continue to offer ticketing and entertainment options for the next year, customers will be referred to Zomatos new app, District. Zomato will provide incentives to its customers, to encourage this transition.

With District, Zomato is broadening its range of lifestyle, going outside of its primary business of food delivery.