Zomato will spin off the new business into a new app called ‘District’. Under the deal, Zomato will fully acquire Orbgen Technologies Pvt Ltd (OTPL), which is into movie ticketing.
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Zomato announced the immediate shutdown of its intercity ‘Legends’ services on Thursday, August 22. CEO Deepinder Goyal revealed the decision on the microblogging platform ‘X,’ citing the lack of product market fit after two years of attempts. The intercity food delivery service, which aimed to offer iconic dishes from 10 cities to other parts of the country, has been discontinued. In July 2024, Zomato had briefly paused the service and reintroduced it with modifications to enhance profitability. Post the shutdown, Zomato’s food-delivery operations will be limited to within cities.
This development follows the recent announcement of Zomato’s acquisition of Paytm’s movie and events ticketing businesses for Rs. 2,034 crore. The deal, approved by Zomato and Paytm parent company One 97 Communications boards, is an all-cash transaction.
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As part of the agreement, Paytm’s entertainment ticketing business will be transferred to its subsidiaries Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), followed by the sale of a 100 per cent stake in these subsidiaries (which operate the TicketNew and Insider platforms) to Zomato.
Subsequently, Zomato will spin off the new business into a new app called ‘District’. Under the deal, Zomato will fully acquire Orbgen Technologies Pvt Ltd (OTPL), which is into movie ticketing, for Rs. 1,264.6 crore and buy Wasteland Entertainment Pvt Ltd, which is into events ticketing for Rs. 783.8 crore.
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Profit of Rs 253 Crore Amidst Rising Revenues
Zomato’s financial report for the April-June quarter revealed a significant leap in net profit, reaching Rs 253 crore compared to Rs 2 crore the previous year. This growth was accompanied by a 74% increase in operating revenue, totaling Rs 4,206 crore. The surge in revenue was primarily attributed to the notable contributions from Zomato’s quick-commerce vertical, Blinkit, and its B2B grocery supply unit, Hyperpure.
Additionally, the company introduced a new standalone app, District, catering to its going-out business segment, encompassing dining, events, and ticketing services. Despite a 27% increase in the gross order value of its food delivery business, amounting to Rs 9,264 crore, the vertical’s profitability suffered due to seasonal fluctuations.
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