Wow! Momo Foods, the parent company of Wow! Momo, Wow! China and Wow! Chicken, has announced that it has raised Rs 350 crore from Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia. This is the largest funding round for the company so far and values it at over Rs 2,400 crore.
About the deal
The deal involves both primary infusion of capital and secondary purchase of shares from early-stage investors, including Indian Angel Network (IAN) and Lighthouse Funds. IAN investors will get a full exit while Lighthouse Funds will take a partial exit. Existing investor Oaks Asset Management also invested an additional Rs 60 crore in this round.
Sagar Daryani, cofounder and CEO of Wow! Momo Foods, said, “We are delighted to partner with Khazanah Nasional Berhad as we embark on our next phase of growth. Khazanah is one of the most respected sovereign wealth funds in the world and has backed some of the most successful companies globally. We are confident that their expertise and support will help us scale new heights and transform the food space in India.”
About the company
Wow! Momo Foods was founded in 2008 by Sagar Daryani and Binod Homagai as a chain of quick-service restaurants (QSRs) serving momos, a popular snack in India. The company later expanded its offerings to include Chinese cuisine under Wow! China and chicken products under Wow! Chicken. The company also launched its FMCG arm, which sells packaged frozen ready-to-eat momos in retail stores and e-commerce platforms.
The company operates over 630 outlets across more than 35 cities in India and plans to add another 100 cities and 1,500 outlets in the next three years. The company claims to have achieved profitability at the unit level and expects to become EBITDA positive by FY25.
About the market
The QSR market in India is witnessing robust growth, driven by increased affordability, convenience and consumer demand for fast foods. According to ratings firm Icra, the QSR segment is expected to add around 2,300 stores between FY23 and FY25 and invest an estimated Rs 5,800 crore in capital expenditure.
Wow! Momo Foods competes with other QSR chains such as Domino’s Pizza, McDonald’s, Burger King, KFC, Pizza Hut and Subway, as well as homegrown brands such as Chai Point, Chaayos, Faasos and Box8.