September 4 saw the listing of shares of Mdundo on Nasdaq’s First North Growth Market in Copenhagen, Denmark.
This comes after the Danish firm, Mdundo offered 4 million new shares at 40 million Danish Kroner in August. They were marketed in Denmark but got interest from Sweden and other countries, resulting in 2,900 investors taking up 8.4 million shares, and giving Mdundo a value of 102 million Kroner (~$16 million).
Excerpts from Mdundo’s investor prospectus.
- Ticker name: “MDUNDO“
- Mdundo enables musicians to upload songs and make money from their content as people to stream and download music from their app and website. It has a commercial focus in Kenya and Tanzania.
- Mdundo means rhythm in Swahili and it has 5 million monthly active users, half of who are in East Africa, who stream music free, to listen, and pay to download songs.
- Mdundo has paid out 1.9 million Kroner (~$300,000) to artistes who have uploaded 230,000 songs from 32 African countries.
- Tanzania’s Diamond Platnumz is one of Mdundo’s top artists with over 7.2 million downloads, while Kenya’s Willy Paul, Naiboi and Khaligraph Jones have all received the Mdundo Platinum Award which is given to musicians with 1 million downloads.
- Use of Funds: With the new investments, Mdundo aims to double in size to 9 million subscribers in 2021 and 18 million in 2022, targeting sub-Saharan Africa, the world’s fastest-growing mobile market which will be 623 million large by 2025. The app can also be used out of Africa and the company plans to grow its international users with a subscription model that goes for about $2 per month.
- In the deal, they are acquiring 100% of Mdundo Kenya for 1.2 million Kroner (~Kshs 21 million). As at June 2019, it had revenue of Kshs 6.8 million and a loss of Kshs 21 million for the year. This was after costs of sales of Kshs 4 million (they pay musicians over half their revenue), salaries of 12 million, and 4 million each for administration and distribution expenses. Mdundo Kenya had accumulated losses of Kshs 75 million.
- Upside: They estimate their valuation at $2 per active user while their peers are trading at $10 to $115 per user.
- Mdundo had 40 angel investors, and the new shares were sold through Danske Bank, Nordnet, Jyske, Nordea Nykredit and Arbejdernes Landsbank, with Danske Bank as the settlement agent.
- Other “African exports” to foreign exchanges include Jumia at the NYSE, Naspers at Amsterdam and Airtel Africa and Vivo Energy in London. Hope Mdundo performs better than Jumia.