Africa-focused streaming service Mdundo reports 41% jump in active users, as Nigerian currency crisis pressures revenue

Mdundo staff photo.

Africa-focused music streaming service Mdundo has reported a 41% YoY jump in monthly active users (MAUs), but its revenues have come in short of forecasts due to a currency crisis in Nigeria.

Mdundo, which is listed on the Danish stock exchange and reports earnings in Danish kroner, said it’s targeting revenue of DKK 12 million to 14 million (USD $1.71 million to $1.99 million) for fiscal year 2023-2024, which ends June 30, 2024.

That’s well below its forecast from mid-2023, when the company expected revenue for 2023-2024 to come in at DKK 17 million to 21 million ($2.42 million to $2.99 million).

“Subscription and advertising revenue growth measured in DKK is impacted by a 38% decline in the [Nigerian] naira value from January to March 2024,” the company said in its report for fiscal Q3, which corresponds to calendar Q1 2024.

During this period, the naira fell from trading at around 775 naira to one US dollar, to a low above 1,600 naira to the dollar, before bouncing back to around 1,200 naira to the dollar by the end of March.

Nigeria’s currency has been under pressure since last year, when a government plan to introduce new banknotes and encourage the use of digital payments by limiting cash withdrawals hit a snag. Cash shortages across the country led to a surge in demand for foreign currencies in the unofficial “parallel market” for currencies.

In January of this year, market regulator FMDQ said it had revised its methodology for calculating the naira’s official value, causing a sharp downturn in its value as the official exchange rate came to more closely match the rate on the unofficial parallel market.

“Despite this, revenue in Nigeria keeps growing when measured in naira,” Mdundo said in its report issued on Wednesday (April 16).

“Furthermore, the naira’s depreciation reduces operating costs [when measured] in DKK, leading to improved EBITDA guidance for 2023/24,” the company added. “With Nigeria’s sizable market and vibrant music industry, Mdundo sees long-term potential. Management closely monitors the evolving situation in Nigeria.”

Nigeria is one of Mdundo’s key markets, along with Kenya, Ghana, Tanzania and South Africa. The five countries accounted for roughly two-thirds of Mdundo’s MAUs as of last year.

Additionally, the company’s advertising revenue has come under pressure. In its fiscal H1 report in February, Mdundo recorded a steep decline in ad revenue, dipping 41% YoY to DKK 2.5 million ($357,000), which it attributed to a delayed and underperforming reseller agreement.

Mdundo’s user base continues to grow by leaps and bounds. The company reported 34.5 million monthly active users at the end of March 2024, up from 24.5 million in the same quarter a year earlier, and it expects that number to hit 35 million by the end of the fiscal year in June. That’s in line with its forecasts from last year.

The company reiterated its expectations that it will hit 50 million MAUs in 2025.

“With Nigeria’s sizable market and vibrant music industry, Mdundo sees long-term potential. Management closely monitors the evolving situation in Nigeria.”


Beyond that, the company says user growth “is expected to slow down,” and as a result, it’s “shifting focus from user acquisition to a stronger focus on improving unit economics for the current customer base.”

For the fiscal year ending in June, it’s targeting a negative EBITDA of DKK -6 million to DKK -7 million (-$856,000 to -$1 million), which would mark an improvement of approximately DKK 1 million to DKK 2 million over the previous fiscal year.

Mdundo reiterated its forecast that it will swing to a positive EBITDA in 2025.

The company’s user growth has been driven by a strategy of partnering with local wireless providers in key markets, which it says allows it to overcome the obstacle of low penetration of payment cards among African consumers.

“It allows the customers an easy and simple method of payment for our premium product,” CEO Martin Nielsen told MBW in an interview in September 2022.

The company stressed in its latest earnings report that it built “impactful advertising campaigns” in fiscal Q3, including with Coca-Cola for Coke, Sprite and Fanta brands, and with Diageo for brands such as Captain Morgan, Chrome, and Serengeti Lite.

It also ran a campaign for Kenya-based banking conglomerate NCBA, as well as a campaign for Diageo’s Tusker Lager to “empower female artists across Africa. Partnering with influential figures like Fena Gitu and Crystal Asige, we created compelling audio advertisements to inspire the next generation of female musicians.”Music Business Worldwide

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