Quick service restaurant chain Wow! Momo said it has raised $15 million in a Series C funding round led by Tree Line Investment Management, taking its valuation to over Rs 1,225 crore or $165 million. IAN Fund and existing investor Lighthouse Funds also participated in the financing round.
The company will use the fresh funds towards its newly launched FMCG business—ready to eat momos— add more energy to the expansion of its QSR cloud kitchen brands and also launch its new verticals to be announced soon.
Launched in 2008, Wow! Momo Foods operates two QSR brands—Wow! Momo and Wow! China. It currently operates 350 outlets of Wow! Momo and more than 50 outlets of Wow! China, and the company is planning to set up over 150 stores and 50 cloud kitchens in the next year.
The company said it was aiming to grow more than two times on monthly run rate by next August.
Earlier this year, Wow! Momo had forayed into the FMCG space after it launched ready to eat momos which currently are available exclusively on BigBasket. According to the company these items will soon be available on other e-commerce platforms as well and in tier 2 and tier 3 cities in six months.
In October last year, Wow! Momo had raised $6.1 million in a debt round of funding from Chennai-based Anicut Capital, to mainly retire the old debt of Avendus Finance after the company had raised $5 million in debt in 2018.
In 2019, Tiger Global had also led a $23 million round in Wow! Momo, which at the time was being seen as an unusual bet for the New York-based hedge fund. However, uncharacteristically of Tiger Global, Wow! Momo remains to be among the handful of companies that the hedge fund has not backed a second time since its first investment.
Other such examples where Tiger Global did not join in follow-on rounds include Vedantu, MyGate, Roposo and Ninjacart and INDMoney.
While Wow! Momo is yet to file its annual financial statements for FY21, the company had recorded operating revenue of Rs 164.98 crore in FY20 as compared to Rs 119.53 crore in the previous fiscal year. During the period, it had registered a 44.6% surge in its total expenditure to Rs 170.84 crore. The company was close to achieving profitability as it incurred a loss of only Rs 2.39 crore in FY20.