The debt financing will be primarily utilised towards repayment of a Rs 35 crore loan the company had raised from Avendus Finance in 2018 Under the terms of the new financing, Wow! Momo has the option of raising an additional Rs 15 crore by April 2021.
The quick service chain currently has a total of 357-plus stores across Delhi, Mumbai, Bangalore, Pune and Kolkata. Out of this more than 290 are currently operational and over 60 of them are still shut and yet to re-open.
“Setting up new business verticals and a total of 31 new point of sale openings in the past 6 months. We have also taken a conscious call to shut down over 30 non performing outlets nationally and the complete focus is to get back to profitability at the earliest as was the scenario in Pre-Covid times,” Sagar Daryani, chief executive & co-founder of Wow! Momo, said in a prepared statement.
The company-issued statement also said that its business had recovered to 65% of its topline in September, after touching a low of 10% in April 2020 as compared to February 2020, hurt by the ongoing Covid-19 pandemic and the subsequent nationwide lockdown. Additionally, it’s delivery business had gotten back to 180% if compared to pre-Covid times. It also expects business to touch 75 to 80 % of pre-Covid numbers for October, 2020, given that the Indian festive season is about to get underway.
“Ours has been a story of agility and adaptability. These crucial times may have brought our business down initially but we always found new ways and undertook initiatives which helped us stay afloat. We have been more robust than ever with a change in business models, newer collaboration with Café Coffee Day to open Shop-In- Shop formats,” Daryani, said.
Wow! Momo, which owns and operates two brands Wow! Momo and Wow! China had raised Rs 130 crore in equity financing from New York-headquartered investment firm Tiger Global Management, in September last year, and which had valued it at about Rs 860 crore at the time, and was the first consumer product bet placed by the storied investment firm in India.
Wow! Momo, founded in 2008 by Daryani, Binod Kumar Homagai and Shah Miftaur Rahman, also counts the likes of Lighthouse Funds and Indian Angel Network among its list of investors. The latter, which had invested Rs 14 crore across rounds, and had earned Rs 50 crore, or a 70% return on its investment, at the time of Tiger Global’s capital infusion through a secondary transaction that saw it partially exit its investment.
Anicut capital, founded and led by financial services veterans IAS Balamurugan and Ashvin Chadha, manages both debt funds and an angel fund, according to VCCircle.