Quick-service restaurant (QSR) chain Wow! Momo has raised over $15 million (Rs 110 crore) in its Series C round of funding led by Singapore-based hedge fund Tree Line Investment Management.
This comes after VCCircle reported last week that Tree Line was in discussions to invest in biryani restaurant chain Dindigul Thalappakatti.
The Wow! Momo transaction also saw two existing investors -- homegrown private equity fund Lighthouse and early-stage focused Indian Angel Network -- as per a press statement.
The company, which operates the brands Wow! Momo and Wow! China, said that the transaction valued it at over Rs 1,225 crore making it the most valued local QSR brand. It said that the last transaction was struck at a pre-money valuation of Rs 860 crore.
“When we started off with Wow! Momo and later Wow! China, we were confident about the potential that the market holds. We had a clear road map on first strengthening our restaurant business, followed by a foray into the FMCG (fast-moving consumer good) space,” said Sagar Daryani, chief executive of Wow! Momo.
The Kolkata-headquartered company is going to utilise the funding to boost its new FMCG business and fuel expansion of QSR and cloud kitchen brands. The infusion will also enable the firm to launch new verticals soon.
“As India is rapidly emerging from Covid, we are enthusiastic about their growth plans both in the QSR and ready-to-eat category,” said Zaheer Sitabkhan, founder of Tree Line.
Launched in August 2008, the firm runs over 350 outlets of Wow! Momo and more than 50 outlets of Wow! China. It aims to set up over 150 stores and 50 cloud kitchens by the next year.
Earlier this quarter, the company launched its ready-to-eat momos under its FMCG category. These momos are available on Bigbasket and will soon be accessible across other e-commerce channels and modern trade platforms, and after six months, in Tier-II and III cities as well.
In early 2019, Wow! Momo had raised Rs 120 crore from US-based marquee hedge fund Tiger Global Management. In 2017, it secured Rs 40 crore from Lighthouse Funds, and in 2015 got money from Indian Angel Network.
The company had posted net sales of Rs 164 crore for fiscal year 2019-20 as against Rs 119 crore for 2018-19. It slipped into loss for 2019-20, as per VCCEdge, the financial data and research platform of VCCircle.
Not too many transactions have been reported in the restaurant chain space. On Monday, VCCircle reported that Biryani by Kilo is in discussions with several local PE funds to raise its Series B round of funding.
Last week it reported that Dindigul Thalappakatti, a Chennai-based biryani chain of restaurants, is in talks with two PIPE (private investment in public equity) funds to raise capital at a valuation of Rs 1,000 crore.
Casual dining chain Barbeque Nation raised money from Jubilant Foodworks in December 2020 and got capital via public markets earlier this year.
Also, earlier this year, L Catterton made a follow-on investment in one of its portfolio companies, Impresario Entertainment and Hospitality, which operates Social. The capital infusion from L Catterton was aimed at compensating the restaurant for the losses from low footfall.