Indian food delivery and quick commerce company Zomato intends to expand its efforts in the business of helping Indian consumers discover and purchase tickets for movies, sports and events.
The company plans to do so by acquiring the entertainment ticketing business of Paytm, an Indian payments and financial services distribution company, Zomato said in a Wednesday (Aug. 21) announcement.
Subject to the completion of closing conditions, Zomato expects the transaction to close during the current quarter, according to the announcement.
Following the closing of the transaction, the ticketing business will continue to run on the Paytm app for up to 12 months as it transitions to Zomato, the announcement said. About 280 employees will move from Paytm to Zomato along with the business.
Zomato plans to spin off the business into a new app that it intends to call District, per the announcement.
“Our stated mission as an organization is to build products and services that power India’s changing lifestyles,” Zomato said in the announcement.
“We believe, over the next decade and beyond, going-out experiences will continue to grow strong in lockstep with overall growth in lifestyle and consumption. The proposed acquisition helps us add more scale and offer newer use cases (like movie and sports ticketing) to our customers in this segment.”
In its own Wednesday press release about the planned transaction, Paytm owner One 97 Communications Limited (OCL) said the deal will strengthen Paytm’s focus on core payments and financial services distribution.
Paytm has been expanding its offerings in insurance, equity broking and wealth distribution, and expects its expanded business areas to replace the revenue from its entertainment ticketing business, according to the release.
“Today, as it transitions to Zomato ownership, we thank every team member who contributed to building this business,” a Paytm spokesperson said in the release, speaking of the entertainment ticketing 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.”
It was reported in June that discussions around this proposed deal were in the advanced stages and that Paytm was looking to reverse its fortunes amid declining revenues. When reporting its first-ever drop in sales, the company said in May that it would cut its non-core assets.
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