In a letter to the shareholders, Goyal said, “On the people side, this acquisition is our first major acquisition where we are acquiring a team that we do not know very well (in the Uber Eats acquisition we did not acquire any team and in Blinkit we knew the founder and team really well).”
Zomato acquired Uber Eats India in 2020 in an all stock deal. It acquired quick commerce platform Blinkit in 2021 for $570 million.
“We are betting on the team much more this time and hoping everything works out well. The main driver of success is going to be cultural integration of the new team that will join us – which means assimilation of the new team into our flattish culture,” he added.
As part of the acquisition, Zomato will onboard 280 employees part of the organisations being bought. The Rs 2,048 crore all-cash acquisition was announced late Wednesday.
Customer transition
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Goyal pointed out that initially the services being offered on the various apps, as it is now, will continue. These include apps such as Zomato, Paytm, Insider and TicketNew. Eventually, the new app proposed by Zomato – called District – will start offering these services and there will be duplication to begin with. The various offerings include dining out, live events, event ticketing, sports and movie ticketing.
District will be launched over the next few weeks.
“In terms of traffic redirections, we are fairly confident that we will be able to pull this off – this needs high intensity execution muscle (for which we have roped in Rahul Ganjoo, and Pradyot Ghate -two Zomans who were instrumental in making the Uber Eats transition work),” Goyal said.
He also said the company might need to incentivise customers to move from the older apps to District “but that is merely a marginal financial risk as of now, which we will try to eliminate as much as possible.”
Long term opportunity
In terms of the scale and margins potential from the new businesses, Goyal said it would depend on incremental use cases the company is able to build on top of what it has, and is acquiring.
“Post this acquisition, FY26 gross order value (first full financial year post the acquisition) basis the business that we have today should be Rs 10,000+ crore (and growing rapidly). Any further step change in scale here will depend on our ability to build newer use cases like shopping, staycations (travel), etc,” he said.
“We believe, over the next decade and beyond, going-out experiences will continue to grow strongly 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,” he added.
