Wow! Momo Foods, which is one of the most familiar domestic brands in the country, has managed to raise ₹75 crore in new capital. This capital injection was led by the renowned veteran investor Madhusudan Kela, who is now the IC Chairman of Singularity AMC. This new capital investment is meant to assist the company in its next aggressive resurgence of growth, specifically aimed at expansion of operations, product development, and reinforcement of its continued path of sustainable profitability. This investment demonstrates a lot of confidence in the brand in its capability to overcome the competitive food and beverage industry, whilst upholding high standards of excellence.

Brand diversification and capital infusion

This fresh infusion by Madhusudan Kela is quite a one-off, but it is an important part of the ongoing bridge funding round of the company. Several of the world’s and national heavy-hitters have already taken part in this specific round, highlighting the wide institutional backing that Wow! Momo Foods remains appealing.

Past investors in this bridge round were Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia, with 360One and Kamal Agarwal of Haldiram group. The fact that Madhusudan Kela has joined this list of support providers also confirms the business model and direction towards the long-term of the company. Data provided by Tracxn shows that currently, the company has been able to raise a total sum of about $152 million in 14 different funding rounds since its inception.

Wow! Momo Foods was established in 2008 by the entrepreneur Sagar Daryani and Binod Homagi. Wow! Momo Foods has gone beyond a one-product startup company to become a multi-brand powerhouse. The founders have, in the last sixteen years, diversified their offerings systematically to serve different categories of the Indian palate.

The firm has four unique and successful brands that comprise the flagship Wow! Wow! Momo is the Indo-Chinese-centred Momo. Wow! China, the expert in fried chicken. Wow! Chicken, and lately the Wow! Kulfi. Through this diversification, this company has been able to tap into various dining events and geographical groups of customers and, in effect, created a strong ecosystem in the quick-service restaurant arena.

The physical presence of the company is enormous, as more than 800 stores are already in operation in more than 80 cities in India. This scale has been realised by a steady commitment to quality, accessibility, and the local knowledge of the local consumer preferences.

The presence of Wow! Momo covering so large a geographical region underscores its operational strength and product portfolio mass appeal. The founding team has successfully been able to fill the gap between the traditional street food and the modern and organised retail, and momos and other snacks have become a staple of millions of urban Indians.

Expansion strategy and financial performance

Wow! Momo Foods is looking to have more than 100 cities rather than the existing 80-plus. It will add close to 1,500 stores in this period to increase its footprint to more than 1,500 stores. This growth plan is not merely about figures; it is about creating a stronger bond with the consumers in Tier II and Tier III cities, where the need to have an organized and trusted food brand is growing at a high pace.

The company is also aiming to increase its digital and marketing capacity to facilitate this huge physical expansion. Innovation of products is one of the pillars of the strategy, and the funding will motivate new menu innovations in all four brands. Through increased innovation and improved speed of scaling, the company is optimistic that it will be able to keep its competitive advantage and ensure that the company remains the choice of snacks and fast foods in the country.

In anticipation of its next great jump, Wow! Momo already engaged Avendus as its bankers in a far bigger financing round that will take place later in 2016. Such a proactive financial planning implies that the management is looking way past the current bridge round to a huge scale-up.

According to the founding team, headed by Sagar Daryani, they were convinced that Madhusudan Kela believed in their mission, and thus they believed in the intention to create a lasting and massive QSR company that had its roots in India. This atmosphere of creating a brand that Indians cherish and rely on is what is at the center of their mission as they set off towards the next stage of corporate development.

Conclusion

Wow! Momo has reached a turning point with a ₹75 crore investment by Madhusudan Kela. With the backing of an established investor and setting its objectives on a road to profitability, the company stands a strong chance of fulfilling its goal of 1,500 or more stores. The credibility that this round gives increases the confidence of the founding team as well as reaffirms Wow! Momo is a market leader in the Indian QSR market.

With the brand constantly expanding its multi-brand approach into 100 cities, it can still be considered an excellent example of an Indian entrepreneurship success story with the roots in quality, innovation, and the long-term perspective.