QSR Chain Wow! Momo Secures INR 70 Cr Funding from Z3Partners for Expansion

Wow! Momo is a fast food restaurant chain based in India with its headquarters in Kolkata. The chain is known for its variety of momos, momo-filled burgers (MoBurgs), and momo-based desserts. It was founded in 2008 by Sagar Daryani and Binod Homagai, both alumni of St. Xavier’s College. As of December 2021, there are approximately 425 outlets operating in 19 cities across India under Wow! Momo Foods Pvt. Ltd. The company operates three brands – Wow! Momo, Wow! China, and Wow! Chicken, which was recently launched in December 2021. With aspirations to go public through an IPO in the coming years, Wow! Momo Foods Pvt. Ltd. has its sights set on establishing a global presence and competing with industry giants like Domino’s and McDonald’s.

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The Kolkata-based beloved quick-service restaurant (QSR) brand Wow! Momo has secured INR 70 Cr (equivalent to $8.3 Mn) from the indigenous investment firm Z3Partners.

According to Wow! Momo’s co-founder Murali Krishnan, this recent funding round serves as an extension of the significant investment received earlier this year. During that round, the startup garnered support from Malaysian sovereign wealth fund Khazanah Nasional Berhad and OAKS Asset Management.

Khazanah injected INR 350 Cr into Wow! Momo, while OAKS Capital contributed INR 60 Cr. Now, with this fresh injection of funds, the QSR chain’s total raised amount in this funding round reaches INR 480 Cr (approximately $57 Mn).

Last year, Baron Capital observed a significant decrease in valuations for its Indian equities, marking two consecutive quarters of underperformance and a reset in valuation during the latter half of FY23. This trend of valuation cuts was primarily linked to the challenging funding climate and the increasing losses experienced by Indian unicorns, which had garnered investor attention at the start of the year. As investors prioritized profitability and long-term viability, domestic tech startups implemented significant measures, such as workforce reductions, to mitigate their financial losses.

Over the past year, Pine Labs has rolled out a range of fresh offerings tailored for small businesses and enterprises, boosting its revenue streams and retaining loyal clients. The company’s aggressive expansion efforts and acquisition spree have further fueled its customer base.

The startup’s valuation has remained steady since January’s fundraise announcement. Based in Kolkata, the startup plans to utilize the new funds to grow its QSR brand, enhance distribution channels, and bolster research and development efforts for its FMCG division.

In addition to Wow! Momo, the startup manages two other brands: Wow! China and Wow! Chicken.

Wow! Momo announced that out of the total INR 480 Cr raised, INR 270 Cr was through primary infusion and INR 210 Cr was from secondary purchase from early-stage investors.

Krishnan also mentioned that the startup has raised approximately INR 625 Cr to INR 640 Cr since its establishment.

“This is only the beginning for us. We have remained consistent, resilient, and sharply focused on achieving sustainable growth. The confidence shown in us by this latest round of investors reinforces our belief and inspires us to continue being agents of change. We believe that Z3Partners has a strong strategic vision, which will enhance our direction moving forward,” stated Sagar Daryani, cofounder and CEO of Wow! Momo.

In the meantime, Rishi Maheshwari, managing partner of Z3Partners, stated, “This aligns perfectly with our investment strategy of supporting scalable businesses with significant market potential that utilize technology to enhance efficiencies throughout the value chain. We are pleased to collaborate with Wow! Momo as they expand their presence throughout India and strive to become the top homegrown QSR brand in the country.”

Impressive beginnings! Back in 2008, Daryani, Binod Kumar Homagai, and Shah Miftaur Rahman came together to establish Wow! Momo. Later on, Krishnan joined the ranks as a co-founder in 2022. Now, this QSR chain boasts a network of over 600 outlets spread across 38 cities. And guess what? They’re aiming even higher, envisioning a whopping 1,500 stores within the next three years!

Now, while the company hasn’t yet shared its financial reports for the fiscal year 2022-23 (FY23), here’s a glimpse into their recent performance: Operating revenue surged by over double, reaching INR 219.8 Cr in FY22. And hey, good news on the net loss front—it shrank by 10%, down to INR 53.4 Cr in FY22 from INR 59.4 Cr in FY21. Looks like they’re cooking up quite the success story!

Wow! Momo, a Kolkata-based QSR chain, secured INR 70 Cr from Z3Partners along with previous investments from Khazanah Nasional Berhad and OAKS Asset Management, totaling INR 480 Cr in their recent funding round. With plans to expand distribution channels, bolster R&D, and grow their brand, Wow! Momo aims to open 1,500 stores in the next three years. The cofounders express confidence in their sustainable growth strategy, reflecting on their robust operational and financial performance, marked by doubling revenue in FY22 and a 10% reduction in net loss.