Wow! Momo raises $ 15 million led by Singaporean hedge fund Tree Line
Quick Service Restaurant Chain (QSR) Wow! Momo has raised over $ 15 million (Rs 110 crore) in its Series C funding round led by Singapore-based hedge fund Tree Line Investment Management.
It comes after VCCircle reported last week that Tree Line was in talks to invest in biryani restaurant chain Dindigul Thalappakatti.
The Wow! The Momo transaction also saw two existing investors – local private equity fund Lighthouse and Indian Angel Network, focused on early stages – according to a press release.
The company that operates the Wow! Brands Momo and Whoa! China said the deal valued it at over Rs 1,225 crore, making it the most popular local fast food brand. He said the latest deal was made at a pre-monetary valuation of Rs 860 crore.
“When we started with Wow! Momo and later Wow! China, we were confident about the market potential. We had a clear roadmap to first strengthen our restaurant business, followed by a foray into the FMCG (Fast-Moving Consumer Goods) space, ”said Sagar Daryani, Managing Director of Wow! Momo.
The Kolkata-headquartered company will use the funding to boost its new FMCG business and fuel the expansion of the QSR and cloud kitchen brands. The infusion will also allow the company to launch new verticals soon.
“As India rapidly emerges from Covid, we are excited about their growth plans in both the QSR and ready-to-eat category,” said Zaheer Sitabkhan, Founder of Tree Line.
Launched in August 2008, the company manages more than 350 Wow! Momo and over 50 Wow! China. It aims to have more than 150 cloud stores and 50 kitchens in place by next year.
Earlier this quarter, the company launched its ready-to-eat momos in its FMCG category. These momos are available on Bigbasket and will soon be available on other modern eCommerce channels and trading platforms, and after six months, in Tier II and III cities as well.
At the start of 2019, Wow! Momo had raised 120 crore rupees from US hedge fund Tiger Global Management. In 2017 he got Rs 40 crore from Lighthouse Funds and in 2015 got money from Indian Angel Network.
The company had recorded net sales of Rs 164 crore for fiscal year 2019-2020 against Rs 119 crore for 2018-19. It slipped into a loss for 2019-2020, according to VCCEdge, VCCircle’s financial data and research platform.
Few transactions were reported in the restaurant chain space. On Monday, VCCircle announced that Biryani by Kilo is in talks with several local PE funds to lift their Series B round.
Last week, he reported that Dindigul Thalappakatti, a Chennai-based biryani restaurant chain, was in talks with two PIPE (private equity investment) funds to raise capital at a valuation of Rs 1,000 crore.
Casual restaurant chain Barbeque Nation raised funds from Jubilant Foodworks in December 2020 and raised capital through public markets earlier this year.
Additionally, earlier this year L Catterton made a follow-on investment in one of his holding companies, Impresario Entertainment and Hospitality, which operates Social. L Catterton’s capital injection was intended to compensate the restaurant for losses due to low attendance.