Kolkata-based Wow! Momo has raised Rs 44 crore ($6.8 million) in a Series B round of funding led by Lighthouse Funds, the company announced on Tuesday.
The round, which valued the company at around Rs 230 crore, also attracted investment from existing investor Indian Angel Network.
“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,” according to a company official.
Naukri.com founder Sanjeev Bhikchandani had been the lead investor in Wow! Momo on behalf of IAN since the earlier round in 2015.
“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,” said Bhikchandani.
“This company is now going national and might possibly even go overseas,” he added.
In July last year, Wow! Momo received Rs 7.9 crore ($1.18 million) in debt funding from Bandhan Bank to set up back-end infrastructure and to open new stores. The funding included Rs 1 crore in cash. Prior to this, in August 2015, IAN had invested about Rs 10 crore in the company, valuing the nine-year-old company at about Rs 100 crore then.
“Funds raised in the current round will be used for expansion and building of back-end infrastructure for the brand,” said Sagar Daryani, Co-Founder & CEO at Wow! Momo.
The restaurant chain at present has over 115 outlets spread across 8 cities. The format operates out of kiosks, food court quick service outlets, ship-in-shop formats, and high street quick service restaurants. The stores are largely company owned and company operated. Their menu caters to 12 different flavours of momos available in steamed, fried & pan fried formats largely in white and brown flour variants.
The brand has the long term goal of launching an initial public offering in about six to seven years from now. It feels that a 1000 Wow! Momo stores PAN India in the near future is a definite possibility.
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