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Quick-service restaurant (QSR) chain Wow! Momo has raised Rs 45 crore ($6.1 million) in a debt round of funding from Chennai-based Anicut Capital in its latest transaction.

The company said in a statement that the capital will be mainly utilised to retire old debt of Avendus Finance. The Kolkata-based firm had raised Rs 35 crore in debt in 2018.

The company also has an option to raise another Rs 15 crore by April next year.

"We have been more robust than ever with a change in business models, newer collaboration with Café Coffee Day to open shop-in-shop formats, setting up new business verticals and a total of 31 new point-of-sale openings in the past 6 months," said Sagar Daryani, CEO at Wow! Momo.

Wow! Momo and its other brand Wow! China currently has a total of 357 stores across Delhi, Mumbai, Bengaluru, Pune and Kolkata. 

Out of these, 290 are currently operational. The company had to also shut down nearly 30 non-performing units during the past 6 months.

Wow! Momo is said to have generated nearly 3 lakh online orders last month. The company expects to get back to 75 % to 80 % of pre-Covid numbers in October with an aim to touch 4 lakh online orders. 

Daryani said that the firm will raise Rs 100-125 crore in its next equity round of funding slated to happen by the middle of next year. He indicated that Tiger Global Management may also participate in that round.

In early 2019, Wow! Momo had raised Rs 120 crore from Tiger Global.

In 2016, the chain raised Rs 7.9 crore in debt from private-sector lender Bandhan Bank. 

Prior to that, it raised Rs 10 crore from Indian Angel Network (IAN) in 2015. Sanjeev Bikhchandani, Saurabh Shrivastava and Ashvin Chadha were the lead IAN investors in that round, which had valued the chain at Rs 100 crore.

Anicut

The firm is led by financial services veterans IAS Balamurugan and Ashvin Chadha. Apart from two private debt funds, Anicut also manages an angel fund.

The firm hit the first close of its second debt fund at Rs 230 crore a year ago. The second fund has a target corpus of Rs 700 crore and a greenshoe option of Rs 300 crore.

The firm is likely to bring Small Industries Development Bank of India (SIDBI) as a limited partner for the fund.

The lender had secured SIDBI’s backing for its maiden fund as well. Grand Anicut-I had a target of Rs 300 crore and eventually raised Rs 400 crore.

From its maiden fund, Anicut has so far backed companies including Timla Foods, which makes ready-to-eat popcorn; Mysuru-based electronics component maker Kaynes Technology India Pvt. Ltd; Bhopal retail chain Ondoor Concepts Pvt. Ltd; Chennai's Curatio Healthcare (I) Pvt. Ltd; and fintech firm Lendingkart.

QSR deals

The pandemic-hit quick-service restaurant industry has recorded only a handful of deals in the recent past. 

In September, burger chain Burgerama secured pre-Series A funding led by early-stage venture capital fund Madison Capital. Anicut's angel fund also contributed in that round.

Earlier same month, VCCircle reported that Burger King India had raised fresh private equity capital after its proposed initial public offering got delayed due to the pandemic.

In December 2019, Gurugram-based Burger Singh raised an undisclosed amount of funding led by Singapore-based early-stage investment firm RB Investments.

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