Chennai-based Anicut Capital has committed to infuse $8.1 million (Rs 60 crore as per current exchange rates) debt capital in quick service restaurant (QSR) owner Wow! Momo Foods, which operates QSR brands Wow! Momo and Wow! China.
Of the total, the Kolkata headquartered company has received Rs 45 crore ($6.1 million) already, with an option to raise Rs 15 crore ($2 million) by April 2021, a statement said.
The company said it would use the fresh funds to repay a Rs 35 crore loan it availed from Avendus Finance in 2018, and to expand its presence.
The company last raised funds in a $23 million Series B funding round from Tiger Global in September 2019. The round saw a primary investment of Rs 120 crore and secondary investment of Rs 60 crore, giving partial exit to early backers from the Indian Angel Network. The round valued the company at Rs 860 crore.
“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. (We have) set up new business verticals and a total of 31 new point of sale openings in the past six months,” Sagar Daryani, CEO at Wow! Momo, said.
However, the firm has also shuttered over 30 non-performing outlets nationally to focus on profitability, he said.
Founded in 2008 by Daryani, Binod Kumar Homagai and Shah Miftaur Rehman, the company claims to have serviced three lakh online orders last month and plans to get back to around 80% of pre-Covid business in October, projecting delivery of four lakh online orders.
The company, which has a presence in Delhi, Mumbai, Bengaluru, Pune and Kolkata, has reopened 290 stores, while 60 remain shut.
Several QSR brands, cloud kitchen brands and restaurants saw both their dine-in and online delivery businesses shrinking due to the lockdown. However, on Monday, food technology player Zomato claimed that food delivery volumes on its platform were back to pre-Covid peak levels.
Health and wellness platform Cure.fit downsized the operations of its cloud kitchen brand Eat.fit from 15 cities to two. Earlier this year, Shadowfax and food tech company Swiggy scaled back their cloud kitchen operations as well.