Paytm sells movie ticketing business to Zomato for $244 million

Zomato, the Indian food delivery giant, has acquired the entertainment ticketing business of financial services firm Paytm for $244.1 million, signaling a strategic move to expand its “going out” offerings.

The acquisition, among the largest M&A deals among new-age Indian tech companies, includes Paytm’s ticketing services for movies, sports and events. As part of the deal, Paytm’s flagship app will continue to host these offerings for up to 12 months and 280 of its employees will join Zomato, the companies said.

Like food delivery, the new business operates in a duopoly, with Reliance-backed BookMyShow controlling three-fourths of online movie ticketing and over half of online event ticketing, and the rest is with Paytm, according to Jefferies.

The acquisition coincides with a remarkable performance in Zomato’s stock market value with shares soaring over 100% this year as the food delivery giant’s quick commerce business makes deeper inroads in India.

Brokerage firm UBS said this week that it now values Blinkit, Zomato’s quick commerce service, at $15.4 billion, ahead of the Noida headquartered firm’s core food delivery business.

Zomato, which ended trading Wednesday at $27.3 billion market cap, has about $1.5 billion cash on its balance sheet.

The acquisition also aligns with Zomato’s broader strategy to diversify its services, Bank of America analysts said. The move could significantly bolster Zomato’s ambitions to become a one-stop destination for dining and entertainment options, they wrote in a note.

“The proposed acquisition helps us add more scale and offer newer use-cases (like movie and sports ticketing) to our customers in this segment,” Zomato founder and chief executive Deepinder Goyal said in a statement. “It makes us more relevant for our customers which also gives us an opportunity to spin-off the business into a new app (we are going to call it District) which could be a game changer for each of these use cases given the need for a single brand as a destination in this segment.”

Meanwhile, Paytm has been refocusing its efforts on its core fintech operations amid increased regulatory scrutiny. The company’s ticketing division, which was built through the acquisitions of Insider.in and TicketNew, contributed about 9% to Paytm’s overall revenues in the recent quarter and 4% to FY24 net revenues. Paytm acquired Insider.in and TicketNew for a sum of about $32 million.

“Paytm’s move to sell its entertainment ticketing business underscores its core focus on payments and financial services distribution,” Paytm said in a stock exchange filing.