Kolkata-based Wow! Momo Foods — which owns and operates Wow! Momo and Wow! China — recently raised $15 million. The Series C funding round was led by Tree Line Investment Management, which valued the brand at Rs 1,225 crore.
Sagar Daryani, CEO and Co-founder, Wow! Momo Foods, said, the recent fundraise has been a wow experience for the company.
The quick-service restaurant (QSR) chain will use the funds to solely utilise on growth. A major part of the funds will be used for building capacity for FMCG – A momo factory.
Sagar shares the COVID-19 pandemic was a blessing in disguise, which helped make Wow! Momo, a pandemic proof business. “We bounced back. We pivoted big time. It just shows our ability and that adverse times call for being diverse,” he says.
At present, he adds, Wow! Momo is at a Rs 22 crore monthly run rate and expects to grow by 2X in a year.
Sagar says the business has shifted from brick and mortar to click and mortar. Both Wow! Momo and Wow! China have converted from being 70 percent offline to 70 percent online.
With the unlocking amidst the pandemic, the company is now moving to a 50 percent online and 50 percent offline model. “It’s going to be that sweet spot, and it’s going to be more of phygital retail,” he says.
The QSR company is heavily focussing on expansion and is opening 12 new restaurants every month. It is expecting to open around 150 restaurants in the next year.
Besides, Wow! Momo is looking at exploring the cloud kitchen space and it will be getting into two more cuisines. “It’s going to be more Wow! Kitchens that are going to come into the foray,” he says. Wow! Momo and Wow! China is already live, and some new brands are expected to be launched by the end of this calendar year.
Sagar explains the cuisine story is still in its R&D phase. However, with regards to Wow! Kitchens — with four brands under one roof — the QSR company is looking to establish it in four cities – Delhi, Hyderabad, Bengaluru, and Chennai.
Wow! Momo is looking at a Diwali launch for the first brand and a Christmas launch for the second.
The Kolkata-based company entered the FMCG space this quarter and launched the products in mid-July.
At present, its production capacity is quite limited. Hence, the company is making an effort to bring in machines. The facility should be fully capacitated by the end of October or mid-November, Sagar shares.
Wow! Momo has a production capacity of Rs 1-1.5 crore a month. “We are getting stocked out daily, and the response has been fabulous,” says Sagar.
With a slow and steady start, the company should be ready to carpet-bomb the market by January 2022. Within a year, Sagar claims that FMCG is expected to be a strong portion of the business, contributing to growth significantly.
The QSR chain would look at raising another large funding round next year in July-August, shares Sagar. The company is aiming to hit a Rs 25 crore monthly run rate by December 2021, and amp it up to Rs 40 crore by July-August 2022.
Wow! Momo is in no rush to file for an IPO now. “It’s a phenomenal time to do an IPO, but fortunately or unfortunately, we are not in the position,” says Sagar.