Indian food delivery giant Zomato has acquired financial services company Paytm’s entertainment ticketing business for $244.1 million, marking a strategic move to strengthen its ‘out of home’ services.
The acquisition, one of the largest M&A deals between new generation technology companies in India, also includes Paytm’s movie, sports and event ticketing services. As part of the transaction, Paytm’s flagship app will continue to offer these services for up to 12 months, Paytm said in a stock exchange filing.
The acquisition comes at a time of impressive growth for Zomato’s shares, which have surged more than 100% this year as the food-delivery giant’s quick-commerce business pushes deeper into India. Brokerage firm UBS said this week it valued Zomato’s quick-commerce service, Blinkit, at $15.4 billion, more than the Noida-based company’s core food-delivery business.
Bank of America analysts said the acquisition also fits into Zomato’s broader strategy to diversify its offerings. The deal could be a big boost to Zomato’s ambitions to become a one-stop shop for dining and entertainment options, they wrote in a note.
Meanwhile, amid increased regulatory scrutiny, Paytm is refocusing on its core fintech business. Its ticketing division, built on the acquisitions of Insider.in and TicketNew, accounted for about 9% of Paytm’s overall revenue in the most recent quarter. Paytm acquired Insider.in and TicketNew for about $32 million.
“Paytm’s move to sell its entertainment ticketing business underscores its focus on the distribution of payments and financial services,” Paytm said in a stock exchange filing.
This is an ongoing story, more to come.