Written by 
Africa-focused music streaming service Mdundo has reported continued strong growth in monthly active users and paid subscriptions, despite headwinds that resulted in an overall revenue decline.
Mdundo counted 37.8 million monthly active users (MAUs) as of September, up 29.5% YoY, the company said in its fiscal Q1 (calendar Q3) report.
The company reiterated guidance from earlier this year that it expects to reach 40 million MAUs by the end of fiscal year 2024/2025. Mdundo’s fiscal year runs from July 1 to June 30.
It released its Q1 numbers on Thursday (October 10), just days after releasing its full-year report for 2023-2024, in which it recorded revenue of DKK 11.93 million (USD $1.74 million at the current exchange rate), down 5.3% from DKK 12.59 million in the prior fiscal year.
(Mdundo is headquartered in Kenya, but is listed on Denmark’s Nasdaq First North Growth Market exchange, and reports its earnings in Danish krone.)
However, the company noted that the revenue drop was due to weakness in African currencies against the krone.
“In local currencies, revenue actually grew by 10% compared to the previous year and revenue from paid subscriptions increased 112% in local currencies,” Mdundo said.
The company reported a narrowing of its fiscal year EBITDA loss to DKK –6.4 million, down from DKK –7.7 million in the prior fiscal year.
Its guidance calls for further EBITDA improvement in the 2024/25 fiscal year to between DKK –4 million and DKK –5 million.
It’s also forecasting a significant increase in revenue for 2024/25, to DKK 15-17 million ($2.19-2.48 million).
In Danish krone terms, paid subscription revenues jumped 62% YoY, the company said, and now account for 68% of total revenue, up from 35% in the prior fiscal year.
This helped to offset a 45% decline in advertising revenue during the fiscal year, which the company blamed on “delayed and generally unsatisfactory execution of our advertising sales strategy.”
The company says it has “prioritized paid subscriptions,” and to that end, has expanded its network of partnerships with African wireless companies.
It recently signed a partnership with Globacom Nigeria, which has 61 million telecom customers, and has signed a deal with “one additional telecommunications company” that has yet to be officially announced.
Mdundo forecasts two or three such agreements to be signed during the current fiscal year. These agreements will add to existing deals with telecoms such as Vodacom, MTN, Airtel, and Safaricom.
Developing partnerships with telecoms is crucial to growing Mdundo’s paid subscriber base, due to the low penetration rate of payment cards in African markets. Through these partnerships, Mdundo users can pay via their phone bills.
In its Q1 report, Mdundo notified investors of a potential headwind to its growth during the current fiscal year.
“Mdundo.com acquires a big proportion of its users from Google Search, however, within the quarter a rightsholder organization erroneously flagged 150,000 Mdundo.com URLs as copyright infringing pages. As a result… Google delisted the URLs from the search engine and Google Adsense, impacting the organic user numbers and the advertising revenues throughout July, August and September,” Mdundo said.
“Mdundo filed a complaint to the rights organization in early July, as a result all the links had been reinstated within both Google Search and Google Adsense from the beginning of October… Management expects the implications of this incident to normalize during Q2 and don’t expect that it will have any long term impact.”Music Business Worldwide