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streaming service with an emphasis on Africa Mdundo reports a 41% increase in active users despite income pressure from the Nigerian currency crisis

Apr 19, 2024 | Business | 0 comments

Mdundo, an Africa-focused music streaming service listed on the Danish stock exchange, has announced a significant surge of 41% in its monthly active users (MAUs) year over year. However, its revenue projections fell short of expectations due to a currency crisis in Nigeria.

The company, reporting its earnings in Danish kroner, aimed for a revenue target of DKK 12 million to 14 million (USD 1.71 million to $1.99 million) for the fiscal year 2023-2024, ending on June 30, 2024. This forecast is notably lower than the initial projection made in mid-2023, which anticipated revenues ranging from DKK 17 million to 21 million ($2.42 million to $2.99 million).

Mdundo attributed the revenue discrepancy to the substantial decline in the value of the Nigerian naira, which plummeted by 38% against the US dollar from January to March 2024. This volatile currency situation impacted the company’s subscription and advertising revenue growth despite ongoing growth in Nigeria when measured in naira.

Despite the revenue challenges, Mdundo remains optimistic about Nigeria’s market potential and the resilience of its vibrant music industry. With Nigeria being one of its key markets alongside Kenya, Ghana, Tanzania, and South Africa, Mdundo is closely monitoring the situation in Nigeria while acknowledging the long-term opportunities it presents.

Additionally, Mdundo faced pressure on its advertising revenue, experiencing a significant decline in ad revenue during fiscal H1, attributed to a delayed and underperforming reseller agreement.

Despite these challenges, Mdundo’s user base continues to expand rapidly, reaching 34.5 million MAUs by the end of March 2024. The company projects to hit 35 million by the fiscal year-end in June, maintaining its forecast of reaching 50 million MAUs by 2025.

Looking ahead, Mdundo plans to shift its focus from user acquisition to improving unit economics for its current customer base. It targets a negative EBITDA of DKK -6 million to DKK -7 million (—$856,000 to—$1 million) for the fiscal year ending in June, marking an improvement from the previous fiscal year. It expects to achieve positive EBITDA by 2025.

Mdundo attributes its user growth strategy to partnerships with local wireless providers in key markets, facilitating easy payment methods for its premium product. The company also highlighted impactful advertising campaigns in fiscal Q3, collaborating with brands like Coca-Cola, Diageo, and Kenya-based banking conglomerate NCBA, alongside initiatives to empower female artists across Africa.

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