Credit and Finance for MSMEs: Quick service restaurant company Wow! Momo Foods has secured $23 million (around Rs 161 crore) in Series B round of funding led by global startup backer Tiger Global. The new round values the company at $120 million up from around $42 million in 2018 after it raised Rs 3 crore from Fabindia MD, William Bissel last year. The company has expanded with 282 outlets of Wow! Momo and 11 outlets of its newest brand Wow! China spread across 15 cities combined. Wow! Momo had forayed into China this year in March.
The company would deploy capital in scaling its operations to tap more customers in India, according to the company’s CEO and Co-founder Sagar Daryani who announced the development in a statement on Thursday. The company has plans to launch a range of packaged momo and momo sauce offerings even as it would be ultimately preparing for an IPO.
Daryani wasn’t available for details around the IPO plan and other information with respect to this round.
The company has projected revenues of around Rs 190 crore for FY 19-20 while it claimed to be seeing a monthly run rate of more than Rs 15 crore per month currently and launching over 10 new stores monthly. Wow! Momo said that it has been EBITDA positive since inception in 2008 in Kolkata and has been growing at a CAGR of more than 50 per cent for the last 3 years while it hit the double-digit EBITDA for the first time in the first quarter of FY 19-20.
"We expect Wow! Momo to continue gaining market share of Indian QSR.” said Scott Shleifer, Partner, Tiger Global in the statement. The company has enhanced its focus on click and mortar model as it eyes a hybrid operating model that contains a mix of physical stores in prominent retail locations and cloud kitchens, on the other hand, to cater to its delivery business. Daryani is looking to grow profitability to more than 1,000 stores, reaching an annualised turnover of over Rs 1000 crores in the next four-five years.
The company would see $3 million partial secondary exit to the Indian Angel Network (IAN) with approximately 7x return since four years of raising capital from IAN and an estimated IRR of over 70 per cent.