Entrepreneurship Project

Report on WoW Momo!

2019-21

Submitted To: Submitted By:

Dr. Dammalapati Ravinath Ravi Jaiswani
(JI/2019-21/0091)

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About the Company

Wow! Momo is an Indian chain of fast food restaurants headquartered in Kolkata, West

Bengal, India specializing in momos, popular in Nepal, Tibet and India. It was established in
2008 by Mr. Sagar Daryani and Mr. Binod Homagai, alumni of Sr. Xavier’s College, in
Kolkata. The company is headquartered in Kolkata, West Bengal. In 2019, after Tiger Global
Management's investment of ₹130cr, the company was valued at over ₹860 crore.
The company was founded by Mr. Sagar Jagdish Daryani and Mr. Binod Kumar Homagai,
who started selling steamed momos from their 6 by 6 kiosk in Springdale Spencer. The initial
stores were kiosks inside hypermarkets of Big Bazaar and Spencer's in Kolkata, which paved
a way of opening food outlets in malls, tech parks and other commercial locations.
The company has expanded to Kolkata, Mumbai, Delhi, Noida, Gurgaon, Bengaluru,
Chennai, Lucknow, Kochi, Bhubaneswar, Cuttack, Puri, Pune, Hyderabad, and Kanpur. As of
October 2018, WOW! Momo has over 200 outlets across 13 cities in India.

Awards and Recognition

1. Best Dim-sum product chain –Indian Restaurant Congress Award 2016

2. Best Unique Retail Concept Award – Images Retail Award 2017
3. Coca-Cola Golden Spoon Award – Best Quick Service Restaurant in Indian origin
2018
4. Coca-Cola Golden Spoon Award – Best Innovation in Store Design 2018

From Kiosk to Chain of stores

“12 years, 254 outlets, 13 cities: hungry for more, Wow! Momo 2.0 eyes growth, expansion,
and an IPO”

Started in a garage by two students of St Xavier’s College, Kolkata-based Wow! Momo has
been dishing out dumplings, dim sum, and more for over 10 years now. With 254 outlets
across 13 cities, the start-up is now gearing up for the next chapter in its story. 
Backed by investments from Info Edge Founder Sanjeev Bikhchandani, former Infosys CEO
Kris Gopalakrishnan, and Hero Enterprise Chairman Sunil Kant Munjal, among others, the
startup claims to have “90 percent of the market share in the organised momo business”.
Now, the quick service restaurant (QSR) chain has major expansion plans and is even eyeing
an IPO. Wow! Momo plans to raise between Rs 120 crore and Rs 150 crore in its Series B
round and has hired EY as its banker.

Expansion

After successfully building the Wow! Momo brand, the start-up is now looking to strengthen
its second brand, Wow! China, launched earlier this summer. The commerce graduate says

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the company is focusing on “Chindian” cuisine, the Indianized version of Chinese cuisine
that is popular in India.

Chinese food is the second most popular cuisine across North and South India. According to
a  FICCI and Technopark report, the food services market in India is expected to reach Rs
5.52 trillion by 2022.  The reports also highlights that Chinese cuisine is the second most
non-domestic cuisine consumed in India.

Like its parent brand, Wow! China will also operate out of kiosks, food court outlets in malls,
tech parks, high street locations, and cloud kitchens. The brand’s revenue touched Rs 120
crore in FY19. It aims to hit Rs 200 crore this fiscal, which the start-up is well on track to
achieve.

An eye on Supermarkets

The company is also working on a technology to sell “chilled momo” in supermarkets, on the
lines of the “supermarket sushi” concept overseas. The company does not fear any
cannibalisation of its existing momo offerings with this move, and says the two products
would cater to different needs and customers.

The company is also setting up a plant in Kolkata by December-January to manufacture and

retail sauces in the market. The red sauce is extremely popular and people actually ask for it
to be packed so they can take it home and have with various things such as paratha. It expects
the sauces to be available on retail shelves by 2020.

A bite of the international market

The company has registered itself in more than 80 countries and wants to go overseas with its
business. But, it will focus on the domestic business for the next five years. They will
definitely look at Dubai and the GCC countries (Saudi Arabia, Kuwait, the UAE, Qatar,

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Bahrain, and Oman). Expansion will also extend to Sri Lanka, Bangladesh, and other
neighbouring countries. In fact, in an interview, Mr. Sagar told that they have received
several inquiries from Pakistan and Nepal as well. 
How did they get the idea?

They started Wow! Momo immediately after their college. Their journey is pretty much like
Bollywood movie. They started their business with a mere Rs 30,000 and reached to a Rs 230
crore business in the last few years. Even during their college days, they always had in my
mind that they would not be able to pursue MBA because they were very poor in Maths. So,
clearing entrance exams like CAT was not an option.

So, the question was what next after college. They always wanted to build a brand, and there
is no better option than entering the food business to develop a brand. In the food business,
everything works through word of mouth. Before momos, they thought of various
concepts around paranthas. They realized that people have played with burgers, pizzas, and
continental food. But no one had experimented with momos, and that’s how the idea of
Wow! Momo bounced in. There was a lady near my school where I used to go. So, she used
to give the momos in 10-15 minutes, and that gives me the confidence that good quality
momos can be prepared in a short span of time.

Challenges faced

The biggest challenge we faces was of less initial capital investment. We started our business
with a mere investment of Rs 30,000. We started with a small 6X6 sq ft kiosk, it was a retail
shop format. In this particular format, you don’t need to make the flooring or ceiling; it was
just a regular kiosk. However, we used bright yellow colors similar to the kind of the Bank
Kiosks where do they do promotional activities like distributing leaflets and helping people
understand their product. At that time, we never had the money to print leaflets and didn’t
even hire a full-time chef. We had a part-time chef who used to come in the morning and
prepare momos for us. But, we had a full-time helper who would stand at the stall to sell the
momos. Binod and I used to wear Wow! Momo t-shirt and go up to customers with a tray of
momos for taste sampling as we did not have money for leaflets. I was confident that our
product was good and after tasting momos, customers would come to our counter to buy a
full plate of Momos. That’s how we marketed our brand and our product. We always had
a product oriented marketing campaign. At Wow! Momo we decided not to spend money on
hoardings.

Maintaining food standards and consistency across all outlets after

expansion

After our expansion, we never raised funding because money was not the problem. We were
doing well and knew that we would get the funding. But you need to have the right
bandwidth. Talking about consistency, we kept our model very simple as we only have 15
SKUs (Stock Keeping Unit) with 12 types of Momos, one thukpa and three types of sauces.
The 15 SKUs are prepared in the central kitchen and supplied to different stores. We have
five base kitchens across eight cities, so we are only managing those five base kitchens.

Future Plans other than Momos?

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We have turned Momos into a complete meal. For the next five to seven years we will focus
on Momos only. We want to become the first QSR company which is listed on the stock
exchange. Further, we want to build an international brand like Domino’s, Pizza Hut and
KFC.
Conclusion & Suggestion

“Where there is a will there is a way.”  Sagar Daryani, Co-Founder, Wow! Momo and his
partner Binod Kumar have proven this statement to be true. A small business started with
mere Rs 30,000, now stands at a staggering INR 230 Crore Valuation in just a few years of
inception. It has been able to expand its wings across eight cities and 96 stores. The very first
QSR format specializing in momos has expanded rapidly. In fact, the Quick Service
Restaurant (QSR) format is one of the profitable of the restaurant segments.

If I would have been in their place I would have also extended my hands to the unorganized
market of momos as well because only the higher income group people have access to Wow
momo stores as the stores are at reputable locations (Airports, malls).

One suggestion which I would like to give to them is that rather than charging too high for a
plate of momos they should cut down the prices a bit. There will not be a much change in
their revenue after cutting down the prices as the demand for the product will also rise.