In a significant move, Chinese e-commerce group Alibaba has decided to invest over Rs 120 crore to acquire a substantial majority stake in city-based Orbgen Technologies Private Limited, that runs the online-ticketing website TicketNew.
TicketNew, founded in 2007 by Ramkumar Nammalvar, is an online ticket-booking platform for movies, theatres, events, stores, sports, parties, and other entertainment activities.
The acquisition was done through Alibaba Pictures Group Limited, the company’s flagship entertainment arm. It signals its major buy in the burgeoning internet ticketing industry outside China.
The entry of Alibaba was facilitated through a combination of stake dilution by promoters led by Mr. Nammalvar and others, and issue of fresh equity at an undisclosed premium.
According to Mr. Nammalvar, Orbgen Technologies notched a topline of Rs. 18 crore in 2015-16 and has been showing profits for the last five years. After the acquisition, Alibaba will have four nominees on the board of Orbgen Technologies. The promoters will have two representatives.
Stating that this was the maiden fundraising exercise by Orbgen since its inception, Mr. Nammalvar said this would bring growth money for the company and also provide some return on capital investment for the promoters. He added that the company had lately added 120 people to its workforce, which now totals 250.
TicketNew, according to a company release, has a presence in over 300 cities in India. “The company holds a strong position in the movie ticketing space in the country due to its unmatched network of neighbourhood theatres to large cinema chains across urban and rural areas,” the release stated.
With Alibaba on board, Mr. Nammalvar was hopeful that TicketNew would emerge as a good competitor in the space which is largely dominated by BookMyShow. He estimated the movie-ticketing market in India to be in the vicinity of $2.2 billion to $2.5 billion and that out of this, online ticketing constituted only 10-15%.
He said the per-screen ratio was very negligible in India. In China, it stood at 40,000 screens, he added.
He said TicketNew had now tied up with major multiplexes in the country, and asserted that TicketNew is now gearing up to spread its presence across India by beefing up its client strength and enlarging its customer base.
In the last few years, Alibaba Pictures has expanded its businesses beyond its home market. It has an office in Los Angeles, and has been looking to expand its footprint in the Asia-Pacific region. “In India, the online movie ticketing is becoming increasingly popular, with increasing penetrations in tier-2 and tier-3 regions. The strategic partnership between Alibaba Pictures and TicketNew can be mutually beneficial.
“Given Alibaba Pictures’ operational knowhow and financial resources, the partnership can potentially help strengthen the leadership and market share of TicketNew in the e-commerce ticketing space and enable the company to capitalize on the burgeoning consumer market in India,’’ the release added.
Orbgen has offices in Chennai and Hyderabad. It intends to set up offices in Delhi, Mumbai and Bengaluru soon.
