Major food delivery company Zomato is in early negotiations to purchase movie and event ticketing company Paytm, a fintech player. The estimated value of the deal is between Rs 1,600 crore and Rs 2,000 crore, according to sources.
The discussions are happening while Paytm is concentrating on growing its financial services and payments businesses.
When everything is said and done, this will be the largest acquisition made by the major meal delivery company since it bought Blinkit for $569 million in all shares in 2022.
According to sources, Paytm is currently combining its inner vertical and movie business into one team.
Up until the time of publication, attempts to get in contact with Paytm and Zomato were unsuccessful.
The company founded by Vijay Shekhar Sharma is attempting to make up ground by emphasising payments even more and putting financial services distribution first. Due to their ability to expand and turn a profit at a bigger scale, the corporation is concentrating on its larger enterprises.
“Paytm wants to focus on scalable commerce. The company’s focus will continue to be on digital goods commerce so segments like deals, gift vouchers, and travel, which help its merchants to scale their business and boost overall sales,” sources said.
The corporation no longer has any “non-core” companies as a result of this transaction.
Paytm declared that it would avoid non-core activities and concentrate on reducing its personnel expenses.
In order to do this, the company is reevaluating its choice to carry on with non-core activities including cross-border sales and providing software as a service (SaaS) to banks, among other things.
“If you notice the cost structure of overall engineering and technology, it has been larger than what a pure payment company would have had,” Sharma said during the analyst call post Q4 results.
The corporation plans to reduce staff expenses and projects an annual savings in human costs of between Rs 400 and Rs 500 crore.
Although Paytm does not separately release data for its movie and event ticketing business, its broader marketing services division saw yearly sales of over $208 million in the fiscal year that ended in March 2024. This covers the movie and ticketing industries as well as gift cards and credit card marketing.
The transaction is consistent with Zomato’s plan to increase funding for its expansion. Just last week, the company announced that it will be investing Rs 100 crore in Zomato Entertainment, which is involved in live events and tickets.
Looking ahead
Paytm aims to focus solely on its payments and financial services business
Paytm is currently merging its ‘Movies’ business and the ‘Insider’ vertical into one team, say sources
Zomato announced last week that it would put Rs 100 crore into its live events and ticketing division, Zomato Entertainment.