Need to share wealth to make wealth: Wow! Momo Foods CEO

"You need to share wealth to make wealth. Otherwise, you can’t get there alone,” said Sagar Daryani, Co-founder and CEO of Wow! Momo Foods.

“I can proudly say that 20% of my company I have shared with my employees as ESOPs and co-founders. I have brought in co-founders when I have been valued at Rs 1,000 crore, etc., because I believe it’s [not] how big a power you own but how big the pie is,” he said in a keynote address at the second edition of TechSparks Mumbai.

At present, Wow! Momo Foods has about 6,000 employees.

The 35-year-old entrepreneur said he dreams of setting up 50 hospitals in 15 years. “The first hospital is coming up this year. We’re opening a 25-seater hospital for HIV [positive] kids in Kolkata,” he said, adding that the company is working with an NGO to set up the hospital.

Daryani and his co-founder Binod Homagai started the momo brand with Rs 30,000, using the shop-in-shop format at a Spencer’s Daily outlet in Kolkata. Today, the fast food chain has grown to 630 outlets across 35 cities.

Recalling his early days, Daryani said both the co-founders would walk back home with empty ‘jhola’ bags after selling momos every day to save on auto rickshaw fares; they learnt that every Re 1 saved is Rs 10 earned.

“That’s how you build a profitable business. Dhandha manda nahi hona chahiye (loosely translated to “business should not be dull”). You have to make money in business. In a business, the customer is God. That’s how we have grown,” he added.

Wow! Momo Foods, which raised $42 million from Khazanah Nasional Berhad (Malaysia’s sovereign wealth fund) in January this year, has received a cumulative of $152 million in funding, according to Tracxn data.

The company claims to have earned Rs 400 crore in revenue in FY23. It hopes to exceed Rs 500 crore in FY24 and establish its presence in Southeast Asia and Gulf Cooperation Council countries.

Talking about how the print media made the company 'God', Daryani said he found his mentor in Sanjeev Bikhchandani, Founder and Executive Vice-Chairman of Info Edge, who invested in Wow! Momo Foods.

He termed 2019 as “the best year" for the business, where Wow! Momo Foods clocked Rs 180 crore in topline and raised money from Tiger Global Management. “(We) broke the myth that Tiger invests only in tech businesses.”

All was going well for the company until COVID-19 happened. Of the 300 outlets, only 60 were open and the company had 3,000 employees. However, the pandemic resulted in version 2.0 of Wow! Momo Foods.

Earlier, only a tenth of the business was by way of takeaway delivery, but the pandemic changed almost all orders to online delivery. “We learned what ecommerce is. We learned what D2C (direct-to-consumer) is. We learnt what ‘cost-for-click’ is. And we unlearned a lot of things,” said Daryani, explaining how the company reinvented itself and turned an obstacle into an opportunity.

As it scaled, Wow! Momo Foods got two additional co-founders—Shah Miftaur Rahman (CFO) and Murali Krishnan (CMO). Daryani said it is important to get co-founders with complementary skill sets.

“I think you need to understand the mindsets you have. You need to know what you want. The skillsets your co-founder brings must be very different from you(rs). Get someone completely opposite because the balance is very, very important,” he said.