Wow! Momo Foods, which owns and operates quick-service restaurant (QSR) brands Wow! Momo and Wow! China, has raised $23 million in a Series B funding round led by Tiger Global , one of the most prolific global investors in Indian startups . This is Tiger Global’s first investment in a QSR brand in India.

After the investment, the restaurant chain is valued at $120 million ( ₹860 crore), up 187% from the ₹300 crore valuation it had garnered in a funding round last year, when ethnic apparel and furnishings retailer Fabindia’s managing director William Bissell had invested ₹3 crore.

Conceived in a garage by two students of St Xavier’s College, Kolkata, with an initial investment of ₹30,000, the firm has primarily been serving momos (a form of dumpling) since 2008. It currently has 282 outlets of Wow! Momo and 11 outlets of Wow! China across 15 cities. The startup had launched Wow! China in March 2019. It will be working toward a public offering, the company said in a statement on Wednesday, without giving a timeline.

“This partnership is indeed a big step forward in our endeavour to become an Indian origin QSR chain with an aim to go global in times to come. We will smartly use the capital infused to further scale our operations backed with disruptive research and development to reach out to a larger consumer base within the country," said Sagar Daryani, chief executive and co-founder of Wow! Momo Foods.

Wow! Momo Foods expects to make ₹190 crore in revenue in FY20. The company said it is currently clocking a monthly run rate of over ₹15 crore and opening over 10 new stores every month. It did not divulge its financials for the previous fiscal year.

The company said it has been Ebitda positive since inception and growing at a compound annual growth rate of over 50% for the last three years. Ebitda stands for earnings before interest, tax, depreciation and amortization.

It is now looking to build a hybrid operating model through a mix of physical stores in prominent retail locations and cloud kitchens to cater to the growing delivery business.

"We expect Wow! Momo to continue gaining market share of Indian QSR," said Scott Shleifer, partner and head, private equity, Tiger Global Management.

A large part of the funding by Tiger Global is primary capital for growth, while $3 million was used for providing a partial exit to the Indian Angel Network (IAN), an early investor in the company.

IAN is taking home nearly 7x return on the capital it invested four years ago, with an impressive estimated IRR (internal rate of returns) of over 70%. In 2015, Wow! Momo had raised Rs10 crore from its first backer, IAN, lead by Sanjeev Bikhchandani, Saurabh Srivastava and Ashvin Chadha.

Tiger Global has been investing heavily in India this year, with a growing focus on the financial services and B2B sectors. Some of its investments this year include a $90-million round in agri-tech startup Ninjacart and a $60 million infusion in B2B industrial goods marketplace Moglix.

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