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.
“It’s a new source of income for us. When we listed the company in September 2020, we predicted revenue from this revenue stream to be 40% of revenue within a few years and that is still our forecast,” said founder Martin Nielsen.
Mdundo users access music via USSD services on a bundled schedule (daily, weekly or monthly). The streaming service can also be accessed through its website or app, which has over a 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, a growth of 46 percentage points compared to December 2020. The company pays more than 50% of its revenue to music creators.
The Kenya-based company was founded in 2013 and listed on Nasdaq First North Growth Market – a northern division of Nasdaq – in September 2020 to accelerate its growth across Africa. It has grown from a user base of less than 1 million in 2016 to 13.8 million by the end of 2021. It plans to increase its user base beyond 18 million by the middle of this year.
Paid subscribers accounted for 14% of Mdundo’s revenue in 2021, Nielsen said, as ad revenue for its free streaming service grew 63% after it set up sales teams in Nigeria and Tanzania to expand. quickly its business operations beyond Kenya.
“We are rapidly expanding our business operations outside of our home market, Kenya. This allows us to be closer to advertising clients across the continent and therefore raise awareness and educate around our unique advertising formats and reach,” he said.
The company is also doubling its business focus on Ghana and Uganda, and expects greater revenue growth this year following a new advertising deal that saw it quadruple its monthly revenue from display ads to 225,000. DKK ($34,581).
Its overall revenue is also growing, doubling in the second half of 2021 to DKK 2.5 million ($382,900) from a similar period the previous year. Overall, it expects 400% revenue growth in its next full fiscal year.
“Revenue growth is the result of expanding our sales operations into new markets,” Nielsen said.
Across Africa, there are more than 20 music streaming services, including Sweden’s Spotify, which has a presence in 44 countries after expanding to 38 other countries on the continent last year. Nigerian-headquartered Boomplay and Kenyan telecommunications company 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, he teamed up with anti-piracy specialists Audiolock to remove counterfeit links for African music from unlicensed websites.
“We still see the greatest competition to 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 we aim to provide a great alternative to that.