Business model

Mdundo’s business model consists of revenues from advertising and secondarily from subscription payments charged by telecom companies. The model is thus similar to, for example, the business model of Spotify and Asian streaming services, where the user is either advertising-funded through audio commercials or pays an ongoing subscription. Significant factors for Mdundo’s investment case are therefore the number of users, advertising sales and paying subscribers (primarily through agreements with telecom companies). Revenue in 2020/21 was DKK 2.3 million, which increased to DKK 7.2 million in 2021/22 and is expected to increase to a further DKK 13-16 million in 2022/2023, including from annual advertising agreements.

From December 2021 to December 2022, the number of monthly active users (MAU) on Mdundo’s platform increased from 13.3 million to 23.4 million, corresponding to a growth of 76%. The company has a target of more than 50 million users by 2025.

MAU 2015/16 – 2021/22E

An essential part of the investment case is how many telecom subscribers will become paying users of Mdundo and the number of agreements with telecom companies. Mdundo has signed agreements with the telecommunications companies: Vodacom Tanzania, Airtel Nigeria and MTN in Nigeria, Ghana and South Africa, which together have over 185 million subscribers. The partnerships will enable the telecom provider’s customers to subscribe to Mdundo music packages. Mdundo expects subscription-based revenues from these agreements to account for 40% of total revenues within a few years.

Mdundo has signed deals directly with more than 140,000 African artists, which is a competitive advantage as 80% of the music listened to in Africa is African music. In addition, it reduces costs as royalty payments are made directly to the musicians instead of paying royalties to international record labels, for example.

Business model
Mdundo’s business model comprises primarily of income from ad sales and secondarily from subscriber payments, thus the model is quite similar to Spotify’s business model. Hence, significant factors for Mdundo’s investment case are the number of users and music streams, ad sales and paying subscribers (primarily from agreements with telecom companies).

From the IPO in August 2020 to October 2021, Mdundo has had a growth of more than 100% in number of users resulting in more than 10 mill. monthly active users (MAU). The defined target at the IPO in August 2020 was to reach 18 mill. in June 2022.

MAU 2015/16 – 2021/22E

A fundamental part of the investment case rests on the number of telecom subscribers that covert to paying users of Mdundo along with the number of agreements with telecom companies. Mdundo has agreements with the telecom companies: Vodacom Tanzania along with Airtel and MTN in Nigeria, whom combined have 125 mill. subscribers. End of fiscal year 2021/22, Mdundo expects to have a total of 4-5 agreements with telecom companies.

The revenue was DKK 2,3 mill. in 2020/21 and is expected to increase to DKK 9 mill. in 2021/22 including annual advertisement agreements.