Exclusive: Wow! Momo Foods Raises INR 40 Cr Debt From Anicut Capital

Quick-service restaurants chain Wow! Momo Foods has raised INR 40 Cr in debt from Grand Anicut Fund – 2.

According to filings with the Ministry of Corporate Affairs (MCA) accessed by Inc42, the company had received the consent of its board members to allot 600 Non-Convertible Debentures (NCDs) at a face value of INR 10 lakhs per share, aggregating to a total amount of INR 60 Cr, and 1,277 CCPS at a face value of INR 590 per share and a premium of INR 46,398, aggregating to a total amount of around INR 6 Cr. 

Of the total amount that it was looking to raise, it has so far received INR 40 Cr in debt from the Grand Anicut Fund – 2. 

The Grand Anicut Fund – 2 is the second investment fund of Chennai-based venture capital firm Anicut Capital. 

Wow! Momo Foods last raised funding for a Series B round worth $23 Mn (INR 168 Cr) from US-based investment firm Tiger Global Management. After that round, Wow! Momo Foods had an estimated value of $120 Mn. At the time, the company had claimed that the investment would help accelerate its global ambitions.

The Kolkata-based quick-service restaurant (QSR) startup, founded in 2008 by Binod Kumar Homagai, Sagar Daryani and Shah Miftaur Rahman, specialises in momos and dumplings, a Tibetan food item popular in India, Nepal and China. 

As of September last year, the company was operating 282 outlets of Wow! Momo and 11 outlets of Wow! China, its sister brand which offers fast-food Chinese cuisine. 

It claimed to be clocking a monthly revenue run rate of over INR 15 Cr. The company is said to be EBITDA positive since inception and grown at a CAGR of over 50% from 2016-19.

Early investors in the company include Fabindia MD, William Bissel, Indian Angel Network (IAN), among others. With Tiger Global’s investment, IAN took a $3 Mn partial secondary exit from Wow! Momo Foods, earning approximately seven times return in four years and an estimated internal rate of return (IRR) of over 70%.

Amid the lockdown induced by the Covid-19 pandemic this year, Wow! Momo Foods saw its sales drop drastically, prompting it to start delivering FMCG items and groceries to customers’ homes. The company tied up with ITC, Nestle, P&G and Emami for the products and online delivery platform Swiggy for the distribution, and launched the service in several cities such as Kolkata, Delhi, Bengaluru, Chennai, Mumbai and Bhubaneswar, among others.

Wow! Momo Foods claims to be India’s first major chain of Branded Momos, currently in 90 cities, with a model which sees the company operating out of kiosks, Food Court Quick Service Outlets, Shop – in Shop Models, and High Street Quick Service Restaurants. The stores are largely owned and operated by the company. The company also sells its menu items through food delivery platforms Zomato and Swiggy.

In the QSR segment, Wow! Momo Foods competes with other startups such as Faasos and Cafe Coffee Day, among others. 

According to a report by Google and Boston Consulting Group (BCG) from earlier this year, the Indian foodtech industry is poised to grow at a CAGR of 25-30%, to $8 Bn by the end of 2022.