This post was originally published on this site
Zomato, an Indian food delivery company, has acquired entertainment ticketing from financial services firm Paytm, for $244.1m. This is a strategic move that will allow Zomato to expand its “going out” offerings.
Paytm’s movie, sports, and event ticketing services are included in the acquisition, which is one of the largest M&A transactions among new-age Indian technology companies. Paytm’s flagship application will continue to host the offerings for up to a year and 280 employees will join Zomato as part of the deal.
The acquisition coincides a remarkable performance of Zomato’s stock value, with shares surging over 100% this year. This is as the food delivery giants’ quick commerce business continues to make inroads into India .
UBS, a brokerage firm, said this week it valued Blinkit, Zomato’s quick commerce service at $15.4 billion. This is more than the core food delivery business of the Noida-based firm.
Zomato, whose market capitalization ended Wednesday at $27.3 Billion, has approximately $1.5 Billion cash on its balance sheets.
Analysts at Bank of America said that the acquisition is also in line with Zomato’s strategy to diversify services. In a note, the analysts wrote that this acquisition could help Zomato achieve its goal of becoming a one-stop shop for dining and entertainment.
Deepinder Goyal, the founder and CEO of Zomato, said in a press release that “the proposed acquisition helps us to add more scale and provide newer use cases (like movie and sport ticketing) to customers in this segment.” It makes us more relevant to our customers and gives us the opportunity to spin-off this business into a brand new app. We are going to name it District. This could be a game changer in each of these use cases, given the need for one single brand to be a destination.
Paytm is refocusing on its core fintech businesses in the face of increased regulatory scrutiny. Paytm’s ticketing division – which was built by the acquisition of Insider.in & TicketNew – contributed 9% to the company’s total revenues in the most recent quarter. Paytm purchased Insider.in for a total of $32 million.
Paytm stated in a filing to the stock exchange that “Paytm’s decision to sell its entertainment tickets business underscores its focus on payments and distribution of financial services.”