Mdundo, an Africa-focused music streaming service, is banking on more partnerships with telecom companies across the continent to boost its earnings and user base. Last year, the company signed deals with MTN and Airtel in Nigeria, and Vodacom in Tanzania, which appear to be paying off after its user base nearly doubled by adding paying subscribers as a source of revenue.
MTN and Airtel Nigeria have a combined customer base of 124.5 million, while Vodacom Tanzania has 15.6 million subscribers, giving Mdundo access to a large target audience.
“This is a new revenue stream for us. When we listed the company in September 2020, we predicted that revenue from this revenue stream would represent 40% of revenue in a few years and that is still our forecast,” said founder Martin Nielsen.
Mdundo users access music through USSD services on a packaged schedule (daily, weekly or monthly). The streaming service is also accessible through its website or app which has over 1 million downloads.
As of December 2021, Mdundo had 1.7 million international songs on its platform and 367,000 tracks uploaded by 122,000 African musicians, up 46 percentage points from December 2020. The company pays over 50% of its revenue to music creators.
The Kenya-based company was founded in 2013 and listed on the Nasdaq First North Growth Market – a division of Nasdaq Nordic – in September 2020 to accelerate its growth across Africa. It has grown from a user base of less than one million in 2016 to 13.8 million by the end of 2021. It is planning to increase its user base to more than 18 million by the middle of this year.
Paying subscribers accounted for 14% of Mdundo’s earnings in 2021, Nielsen said, as advertising revenue from its free streaming service grew 63% after it created sales teams in Nigeria and Tanzania to rapidly grow its sales. commercial operations beyond Kenya.
“We are rapidly increasing our commercial operation outside of our home market, Kenya. This allows us to be closer to advertising clients across the continent and thereby create awareness and educate around our unique advertising formats and reach,” he said.
The company is also doubling its business focus to Ghana and Uganda, and expects further revenue growth this year following a new advertising deal that saw it quadruple its monthly ad revenue to DKK225,000 ($34,581).
Its overall revenue is also growing, doubling in the second half of 2021 to DKK 2.5 million ($382,900) when compared to a similar period a year earlier. Overall, it is projecting 400% growth in revenue in its next full financial year.
“Revenue growth is a result of scaling our sales operation to new markets,” said Nielsen.
Across Africa there are more than 20 music streaming services, including Sweden’s Spotify, which is in 44 countries after expanding to 38 more countries on the continent last year. Nigeria-based Boomplay and Kenya-based telco Safaricom’s Songa are other popular streaming products.
Nielsen, however, is not worried about competition from new market entrants, noting that he is more disturbed by the prevalence of music piracy in Africa than anything else. In 2020, it partnered with anti-piracy experts Audiolock to remove infringing African music links from unlicensed websites.
“We still see the biggest competition for our service as the illegal consumption of music across the continent. This is still where the vast majority of people across Africa get their music, unfortunately, and our aim is to provide a great alternative to that.”