Wow! Momo Foods, which owns and operates two quick-service restaurant brands Wow! Momo and Wow! China is geared to embark on the next set of fast food adventures astride the latest Series B funding worth $23 million led by Tiger Global.
Following the investment, the restaurant chain is now valued at a massive $120 million (₹860 crores); this is a significant scale-up from its already remarkable ₹300 crore valuation which it had achieved after securing ₹3 crores from Fabindia MD, William Bissel in 2018.
Speaking on the investment, Sagar Daryani, CEO & Co-founder of Wow! China/Wow! Momo, said, “From running a handful of kiosks in Kolkata to becoming a brand operating in over 15 cities, our ‘make-in-India’ journey has come a long way. We are super excited & thankful in welcoming Tiger Global aboard & looking forward to leverage upon their global connects, experience & know-how. This partnership is indeed a big step forward in our endeavor to become an Indian origin QSR chain with an aim to go global in times to come. We will smartly use the capital infused to further scale our operations backed with disruptive research and development to reach out to a larger consumer base within the country. We are extremely grateful to Lighthouse Funds and IAN for backing us over the years & being super supportive to our vision.”
Incepted in a garage by two students of St Xavier’s College with an initial investment of only ₹30,000, the Kolkata-based start-up has been dishing out momos and more, for over a decade now. With 282 outlets of Wow! Momo & 11 outlets of its newest brand Wow! China spread across 15 cities combined, the company is now gearing to notch further milestones in its growth trajectory.
The start-up had launched its sister brand Wow! China in March 2019. Moving ahead, the company aims to be a platform for QSR play in India and also plans to unveil a range of packaged momo & momo sauce offerings, and will ultimately be working towards an IPO. Wow! Momo Foods Pvt. Ltd is projected to get to a topline of around ₹190 crores for FY 19-20.
The company is currently clocking a monthly run rate of over ₹15 crores per month and opening over 10 new stores every month.
The company has been EBITDA positive since inception and has been growing at a CAGR of over 50% for the last 3 years and reached a double-digit EBITDA for the first time in the first quarter of FY 19-20. ‘Click & Mortar’ is the new mantra of the company as it looks at building a Hybrid Operating model of a mix of physical stores in prominent retail locations & that of Cloud kitchens to cater to its extensively growing Delivery business. The business intends to expand and grow its profitability to over 1,000 stores, reaching an annualized turnover of over ₹1000 crores in the next 4 to 5 years.
“We are excited to partner with Wow! Momo. We believe the Company has a strong leadership team focused on creating value through innovation and creativity. We expect Wow! Momo to continue gaining market share of Indian QSR.” said Scott Shleifer, Partner, Tiger Global.
A large part of the funding in the current round by Tiger Global is primary capital into the business with a USD 3 million partial secondary exit to the Indian Angel Network with approximately 7x Return in 4 years and an estimated IRR of over 70%.
Speaking on the development, Sanjeev Bikhchandani, Mentor to Wow! Momo who is also part of the company’s advisory board, commented, “I am pleased with the scale & profitability Wow! Momo has achieved since its inception. The team has been able to successfully create a new dominant category in the QSR space on the back of their innovative product offerings & effective customer service. The founding team is driven by innovation and creativity and we are looking forward to tasting the surprises it will unveil in the future. Personally, I am now very bullish on Wow! China as well & feel that it will only add onto the companies profitability with ability to scale & grow faster.”
In 2015, Wow! Momo had raised ₹10 crores from its first backer, Indian Angel Network lead by Sanjeev Bikhchandani, Saurabh Srivastava & Ashvin Chadha. After 18 months of the investment, the investors took a partial exit from Wow! Momo at an IRR of 50% in the subsequent round of equity funding by Lighthouse Funds in 2017 at ₹230 crores.