QSR (Quick Service Restaurant) chain Wow! Momo Foods, which runs Wow! Momo, Wow! China and Wow! Chicken, has raised over Rs 350 crores (around $42 million) from Malaysia’s sovereign wealth fund Khazanah Nasional Berhad. Khazanah will put the amount through primary infusion as well as secondary purchase from Wow! Momo’s early-stage investors including angel investors from Indian Angel Network and Series A investor Lighthouse Funds. IAN investors will get a full exit while Lighthouse funds will take a partial exit.

“There is no greater joy for a founder than giving its initial investors (Indian Angel Network (IAN) and Lighthouse Funds) great partial exits. For us, the Bharat Story has just begun with a huge headway of growth,” said Sagar Daryani, CEO and Co-Founder, Wow! Momo Foods.

Other than Khazanah, existing investor OAKS Asset Management has also invested Rs 60 crore in additional capital into Wow! Momo Foods, the company announced on Tuesday.

The primary fund will be deployed to expand the QSR brand and strengthen the distribution foothold and research and development (R&D) for its FMCG arm.

The latest round takes the total fund infusion in Wow! Momo to over $120 million. The company had reportedly raised $9 million in October last year, part of its Series D round.

Dato’ Amirul Feisal Wan Zahir, Managing Director, Khazanah, said, “We are excited to be on the journey with Wow! Momo in their mission to build the largest QSR brand in India. We aim to encourage the growth of Wow! Momo through enhanced scalability, technological fortification, and focusing on building a strong back-end capability to support its growth.”

Launched in August 2008, Wow! Momo Foods has over 630 outlets in more than 35 cities and plans over 200 outlets in the financial year 2024-25 along with the growth of its FMCG business.

For the next three years, Wow! Momo with Wow! China and Wow! Chicken seeks a presence in over 100 cities and more than 1,500 stores. The brand said it is expanding across various touchpoints in FMCG with over 1,200 retail outlet presence across more than 50 cities in modern trade and quick commerce with its ready-to-eat momos and along with new product launches in FY25.

“We feel that Wow! Momo will not only gain dominance in the domestic market but also be the first globalized QSR company from India. We are ready to scale with the brand,” said Vishal Ootam, Founder and CEO, OAKS Asset Management.

According to the credit rating agency ICRA, key players in the domestic QSR market are likely to add over 2,300 stores between FY23 and FY25 with the magnitude of capex at around Rs 5,800 crore, twice the pre-COVID levels. The industry revenue is expected to grow by around 20-25 per cent in FY24 on account of demand uptick and increasing penetration driven by rapid expansion of stores.

(As published in financialexpress.com, 16 January, 2024 )