As part of the deal, nearly 280 employees from Paytm’s entertainment ticketing business will now join Zomato
Paytm said that the move will allow it to focus on its core payments and financial services distribution business
This comes nearly two months after Paytm and Zomato said that they held initial talks for the deal
Troubled fintech giant Paytm has signed a definitive agreement to sell its entertainment ticketing business to foodtech major Zomato in an INR 2,048 Cr all-cash deal.
“This deal, valued at INR 2,048 Cr on a cash-free, debt-free basis, stands as a testament to the value Paytm has created through its entertainment ticketing business, bringing choice and convenience to millions of Indians with its services and scale,” Paytm said in a statement.
The fintech major expects to close the transaction within the current quarter (Q2 FY25) subject to the “satisfactory completion of all closing conditions”.
Meanwhile, Zomato, in a separate filing, said that its board at a meeting on Wednesday (August 21) approved the acquisition of Paytm’s movie and events ticketing businesses.
The foodtech major said that the acquisition is part of its larger strategy to scale up the “going-out business”. It is pertinent to note that Zomato plans to launch a separate app ‘District’ to scale up its going-out business.
Zomato too has set a 90-day timeline for the execution of the deal.
Under the deal, Paytm will transfer its movie ticketing business to its subsidiary Orbgen Technologies Pvt Ltd (OTPL) and its sports and events ticketing business to another wholly-owned subsidiary Wasteland Entertainment Private Ltd (WEPL).
Afterwards, Zomato will acquire 100% stake in the two subsidiaries (OTPL and WEPL) and will take over the ownership of the two entities. As part of the transaction, nearly 280 employees from Paytm’s entertainment ticketing business will now join Zomato.
As per the contours of the deal released by Zomato, Paytm’s movie ticketing business was pegged at INR 1,264.6 Cr while the event ticketing arm was valued at INR 783.8 Cr.
In a statement, Paytm said that the move will allow the company to focus on its core payments and financial services distribution business. The fintech major also said that expanding its core offerings would substitute revenue from its entertainment ticketing business in the long-run.
“We built the entertainment ticketing business by addressing the market needs of the time. Today, as it transitions to Zomato ownership, we thank every team member who 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,” said a Paytm spokesperson.
Meanwhile, the company also affirmed that tickets will continue to be available on the Paytm app during the transition period. The fintech major said that its ticketing arm clocked revenue of INR 297 Cr and an adjusted EBITDA of INR 29 Cr in the financial year 2023- 24 (FY24).
As per Zomato’s filing, OTPL’s turnover stood at INR 13.14 Cr while WEPL’s turnover was at INR 236 Cr during the year ended March 2024.
This comes a couple of months after reports first surfaced that Paytm held talks with Zomato to sell its movie ticketing and events business for INR 1,500 Cr. At the time, Paytm, without confirming the talks with Zomato, said that it was considering a potential transfer of the said business.
Paytm is one of the biggest players in the online ticketing space, after BookMyShow. The fintech major bought a majority stake in Insider.in for around INR 35 Cr in 2017. Afterwards, it also acquired Chennai-based online ticketing platform TicketNew in 2018 to further bolster its presence in the space.
The sale comes at a time when Paytm has been raking up heavy losses after the Reserve Bank of India’s (RBI) barred its payments bank arm from onboarding any new customers and accepting any fresh customers deposits or credit transactions.
Paytm’s revenue from operations decreased 36% YoY to INR 1,502 Cr in the quarter ended June 2024. Meanwhile, net loss ballooned 134% to INR 840.1 Cr in Q1 FY25 from INR 358.4 Cr in the year-ago period.
