Mdundo, a music streaming service focusing on Africa, is counting on new agreements with carriers throughout the continent to boost its revenue and user base. Last year, the business inked arrangements with MTN and Airtel in Nigeria, as well as Vodacom in Tanzania, that look to be paying off, as the company’s user base nearly doubled as it added paying users as a revenue stream. MTN and Airtel Nigeria have a combined user base of 124.5 million, while Vodacom Tanzania has 15.6 million, allowing Mdundo to reach a large target population.
“This is a new source of revenue for us.” “We expected that revenue from this revenue stream will account for 40% of sales within a few years when we listed the firm in September 2020, and we still believe that,” said founder Martin Nielsen. Mdundo subscribers have access to music via USSD services as part of a packaged deal (daily, weekly or monthly). The streaming service may also be accessed via its website or app, which has received over 1 million downloads.
Mdundo had 1.7 million worldwide songs on its site by December 2021, with 367,000 tracks uploaded by 122,000 African singers, a 46 percent increase over December 2020. Music creators receive more than half of the company’s revenue. To accelerate its growth across Africa, the Kenya-based company was created in 2013 and listed in the Nasdaq First North Growth Market – a Nasdaq Nordic branch — in September 2020. Its user base has risen from less than one million in 2016 to 13.8 million at the end of 2021. By the middle of the year, it hopes to have surpassed 18 million users.
According to Nielsen, paying subscribers contributed for 14% of Mdundo’s earnings in 2021, while advertising revenue from its free streaming service increased by 63 percent after the company established sales teams in Nigeria and Tanzania to expand its commercial activities beyond Kenya. “Outside of our native market of Kenya, we’re fast expanding our commercial operation. This enables us to be closer to advertising clients across the continent, raising awareness and educating them about our unique advertising formats and reach,” he explained.
Following a new advertisement arrangement that quadrupled its monthly earnings from shown advertisements to DKK225, 000 ($34,581), the company is doubling down on its commercial focus on Ghana and Uganda, and expects more revenue growth this year. Its overall revenue is also increasing, more than doubling to DKK 2.5 million ($382,900) in the second half of 2021 compared to the same period the previous year. In the next full financial year, it expects a 400 percent increase in income. “Our sales operation has scaled to new areas, which has resulted in revenue growth,” Nielsen stated.
There are more than 20 music streaming services in Africa, including Sweden’s Spotify, which is available in 44 African nations after expanding to an additional 38 last year. Other popular streaming services include Nigeria’s Boomplay and Kenya’s Safaricom’s Songa. Nielsen, on the other hand, is unconcerned about new market entrants, stating that the prevalence of music piracy in Africa concerns him more than anything else.
It teamed up with anti-piracy experts Audiolock in 2020 to take down unauthorized connections to African music from unlawful websites. “We still regard unauthorized music consumption across the continent as the largest competitor to our service.” Unfortunately, this is still where the vast majority of people in Africa obtain their music, and we hope to provide a better alternative.”