Wow! Momo Raises Rs 44 Cr Funding from Lighthouse Funds and IAN
Kolkata based Wow! Momo, which is touted as India’s first and largest chain of branded Momos, has raised Rs. 44 Crores as Series B funding from Lighthouse Funds and Indian Angel Network at a 230 Cr Valuation. The fund raised also provides a highly profitable exit to some IAN investors (whosoever elected to sell their earlier investment) with an IRR of nearly 50% in less than 18 months.
The deal has been led by Lighthouse Funds, which largely focuses on mid-market consumer driven businesses. IAN, the world’s largest angel network exercised their pre-emptive right in this round. Mr. Sanjeev Bhikchandani, founder of Naukri.com, has been the lead Investor in Wow! Momo on behalf of IAN since the earlier round in 2015.
Talking about the current investment, Lead Investor Sanjeev Bhikchandani commented, “The team at Wow! Momo has executed very well. They have sustained positive cash flows in geographies where they have achieved economies of scale. The breadth of innovations around momos is commendable. They have built a strong brand through word-of-mouth and without spending marketing/advertising dollars. This company is now going National and might possibly even go overseas.At IAN, we recognize the market potential, talent, and the urge to disrupt the ecosystem, which is evident in Sagar, Binod, Miftaur, and their venture.”
Lighthouse Funds has been empowering passionate entrepreneurs for a decade and provides long-term patient capital coupled with active, supportive guidance and mentoring. The fund has invested in brands like Fabindia, Cera Sanitaryware, Xseed Education, Bikaji Foods, Kama Ayurveda to name a few. Speaking on Wow! Momo, Sachin Bhartiya, Partner at Lighthouse Funds commented, "We believe Wow Momo presents a great opportunity to participate in the fast-growing Indian food services space which is witnessing strong demand-side tailwinds. We saw an amazing drive in the founding team, wanting to dream, dare and scale and above all, care for society, which matched the ethos of Lighthouse. Wow Momo has been successful in building an agile and profitable model, all while delivering consistency in quality, taste and service. This is the reason Wow Momo has demonstrated phenomenal growth and earned a fan following in such a short span. We are excited to back Sagar, Binod and Miftaur and help achieve our collective vision for Wow Momo.”
Wow! Momo was also successful in providing a highly profitable exit to some of the IAN Investors who decided to sell their shares partly/completely to Lighthouse at a return of 106 % on their Initial Investment in a period of less than 18 months as part of a secondary deal in the current transaction. KPMG was the Investment Banker advising the company in the above transaction. The financial vendor due diligence was undertaken by Delloite and Khaitan & Co was the legal advisor to the company.
Saurabh Srivastava, Co-Founder, IAN who participated in the earlier round commented, “At IAN, we have had a very fortunate 2017 so far. Year-on-year, we have had exits in our companies and our investors have been able to get cash exits over the last three years continuously. With Wow! Momo, our investors are getting an IRR of nearly 50%. We are really impressed by Wow! Momos fast growth and customer retention rates in such a short period of time. Their success is in line with our vision to identify, mentor and support the next big innovators of our country who have the potential to survive in the competitive startup ecosystem.”
Started with an Initial Investment of Rs.30,000 with just one Kiosk in Kolkata, Wow! Momo is a young & vibrant Startup, devised by two enthusiastic entrepreneurs at the age of 21. Two best friends, Sagar Daryani & Binod Homagai, conceived this idea of turning the regular “momo” into a diversified product category with versions appealing to every taste and had an operational start up even before their exam results were announced. The two young guns were joined by their college mate, Shah Miftaur Rahman, Ex PWC as a third co-founder in 2015 & are currently clocking a turnover of over 5.5 crores a month, recruiting over 1100 employees which proves the success of their creativity and business acumen.They have literally played with momos ploughing back its profits to grow into a restaurant chain of over 115 outlets spread across 8 cities.
An excited Sagar Daryani, Co-Founder & CEO at Wow! Momo commented,“Our mission is to make Wow! Momo the food of all times & creating a niche market for the Masses. We want to be India’s version of Mc Donalds& grow globally and become one of the World's fastest growing QSR Chains, thereby creating employment & adding value to the economy & society as a whole.Funds raised in the current round will be used for Expansion & building of back-end infrastructure for the brand. I am extremely thankful to my Investors for believing in us. They have & continue to be an integral part of our successful journey going forward. r. Our Wow! Story has just begun I believe.”
The brand has a long term goal of doing an IPO (initial Public Offering) by around six to seven years from now. The Team feels a 1000 Wow! Momo stores PAN India in the near future is a definite possibility.
Their Menu caters to 12 different flavours of momos available in Steamed, Fried & Pan Fried formats largely in white & brown flour variants. They have smartly Innovated & Invented to create Sizzler Momos, MoBurg (Momo Burgers), Tandoori Momos, & a Baked Momo Au'gratin to their credit. To top it all, even their dessert is a 'Chocolate momo & last week they launched the all new 'Mango Momo' as a seasonal special. The format operates out of Kiosks, Food Court Quick Service Outlets, Shop – in Shop Models, and High Street Quick Service Restaurants. The stores are largely Company owned & Company Operated.
