After months of anticipation, Zomato‘s founder Deepinder Goyal finally dropped the big news on August 21 that they are buying Paytm’s movie & events ticketing business for INR 2,048 crore in cash. This isn’t just a normal deal; it’s going to be a turning point! With this move, Zomato is gearing up to take its “going-out” or “out-and-about” business to the next level, setting the stage for their brand-new app, ‘District,’ which is just around the corner.
In a letter to shareholders, Zomato laid out its exciting plans. They plan to not only make the most of this acquisition but also to evolve beyond just food delivery and quick commerce.
Here’s a breakdown of what’s ‘the deal’ all about:
Zomato’s Goal
Zomato is using this acquisition to explore the growing market of outing & entertainment experiences. CEO Deepinder Goyal explained that this deal will help Zomato scale up its going-out business & offer new services to customers.
Zomato’s goal is to create products & services that fit the changing lifestyle of Indians, and this deal is a step in making Zomato even more relevant to its customers. It also gives them the chance to spin off their going-out business into a new app called District, because there’s a “need for a single brand as a destination” in this segment.
Decoding Paytm’s Business Model
In his letter to shareholders, Deepinder also highlighted how Paytm’s ticketing business operates. Customers can access it through Paytm’s main app & web platforms, as well as two standalone platforms, Paytm Insider & TicketNew.
In the previous year, Paytm’s ticketing business had a gross order value of over INR 2,000 crore, with 29% year-on-year growth. The company sold 78 million tickets to over 10 million unique customers, generating revenue of INR 297 crore and an adjusted EBITDA of INR 29 crore.
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Teamwork Makes For A Successful Transition
To ensure a smooth transition, Deepinder has brought back former executives Rahul Ganjoo & Pradyot Ghate to scale up the going-out business. They’ll be in charge of moving customer traffic from Paytm, Insider, and TicketNew to the new District app over the next 12 months on Zomato’s vision.
Moreover, as part of the deal, around 280 employees from Paytm’s ticketing division will join Zomato’s District. Deepinder highlighted that integrating these new team members will be crucial for the deal’s success.
“This is our first major acquisition where we’re bringing in a team we don’t know very well… The main challenge will be integrating this new team into our flat organizational culture,” shared the CEO.
Building Yet Another Super Brand!
Deepinder also shared that this deal sets the stage for launching District, a one-stop app for booking movie tickets, IPL tickets, dining-out reservations, live entertainment, and weekend getaways.
However, the transition will be gradual. Zomato’s current going-out services will continue to operate on Zomato Live, while the acquired business will stay on Paytm’s app for up to 12 months, along with the Insider & TicketNew apps.
During this period, Zomato will encourage customers to shift from Zomato, Paytm, Insider, and TicketNew to the new District app. Once most users have made the switch, the company will phase out the old apps. This strategy is similar to what Zomato did with Blinkit, where the app now just has a button to launch the Blinkit services.
“We believe a new brand will help customers associate with going-out experiences and allow us to build a loyalty program that drives higher retention. It also gives us more room in a new app to add new features, rather than squeezing them into a tab on the Zomato app,” said Deepinder. “The goal isn’t to create a super app but to build another “super brand” like Zomato and Blinkit,” he added
Going-Out Business Is Ready to Take Off!
Zomato anticipates its going-out business to reach INR 10,000 crore by the end of FY26, the first full year after acquiring Paytm’s ticketing business. Deepinder also said that any further growth will depend on their ability to add new features like shopping & travel.
He also predicted that the District will stay “near break-even” on an adjusted EBITDA basis in the medium-to-long term but could eventually deliver a 4-5% adjusted EBITDA margin, as a percentage of GOV, if everything goes according to plan.
New Feature Alert!
Days after the announcement of the going-out business, Deepinder Goyal launched an important feature called “Book Now, Sell Anytime.” For instance, if you buy tickets for the upcoming Zomato Feeding India event featuring the megastar Dua Lipa, and are unable to attend due to emergency reasons, you can sell them on the app utilizing this feature. Being first-of-its-kind this feature will enhance customer experience & support the LIVE ticketing industry.
Deepinder Goyal’s bold vision for ‘District’ has the potential to shake up the entertainment scene, turning it into Zomato’s next big hit & transforming the going-out experience 10x better than it is today! What do you think, will ‘District’ be the next big thing? Let us know your thoughts in the comments below!
