The deal has brought an injection of $140 million to Anghami, which has more than 70 million registered users and partnerships with Universal Music Group and Warner Music Group. The total includes $100 million from the special purpose acquisition company (SPAC) and the rest from commitments from Dubai-based Shuaa Capital, which has $14 billion in assets under management.
Founded by Lebanese entrepreneurs Eddy Maroun and Elie Habib, Anghami ("My Melody" in English) launched in 2012 in Beirut and now operates in 15 countries, with other offices in Beirut, Dubai, Cairo and Riyadh. Its main competitors are Spotify, which launched in 2018 in the region, and Deezer, which partnered exclusively that year with Rotana Music, the Middle East’s largest recording label, which recently got an investment from Warner Music.
"Before Anghami there was no monetization whatsoever from the labels besides the ring tones," Maroun tells Billboard. "We really built up the market."
The application offers the full contents of its library of 57 million songs to users in the Middle East-North Africa region, but limits users outside the region to only Arabic songs, due to licensing issues.
Anghami’s staff of more than 120 includes Lebanese native Wassim "Sal" Slaiby, the manager of such artists as The Weeknd and Doja Cat, who is overseeing International Partnerships for the streamer from Los Angeles.
"He believed in it from day one," Maroun says. "That was a huge validation for what we're doing. We then realized we were onto something big."
Slaiby says he grew up about five minutes from Maroun in Beirut but the two didn’t meet until 2017 in London. "This platform is something I believe in and love," Slaiby says, who brought French Montana to Anghami’s five-year anniversary party. “Two guys from where I’m from, it doesn’t happen. We’re not supposed to make it anywhere.”
The local streamer believes it has a better handle on Arab music tastes and better data than its competitors because of its longer run in the region. Maroun says Anghami collects more than 56 million data point per day on its listeners.
In some cases, Anghami’s numbers dwarf those of Spotify. Slaiby noted how Lebanese pop singer Nancy Ajram has 14.8 million followers on Anghami, but only 729,000 monthly listeners on Spotify. “Arabs from across the world go to Anghami,” he says.
Fueled by rapid adoption of 3G and 4G mobile accounts in the region, and partnerships with 36 telcos, Anghami grew its revenues by 80% the past three years and expects to grow by up to 60%-70% over the next 12 months after the capital injection, Maroun says. “I believe that the machine is oiled and ready to really scale up and grow,” he says. “All it needs is the capital.”
With the stock listing, the company expects to have about $110 million in cash and an enterprise value of about $220 million.
Like its competitors, Anghami operates an ad-supported tier and a paid tier called Anghami Plus. Of its 15 million active users, 1.4 million are paying subscribers. The company says it has 10 billion streams a year in volume.
The service shares 50% of its revenues with artists and labels, deducting 8% for publishing rights. Maroun says that given Anghami’s scale, it is still the top revenue generating streaming platform in the region. Depending on the season and country of consumption, 1 million streams yield between $500 and $1,500, he says.
Anghami plans to leverage its large Arab audience to build a broader media platform that includes a new vertical for virtual concerts and live radio broadcasts, and to invest in more podcasts. And the company plans to leverage its experience in the Middle East and North Africa to crack other emerging markets in South Asia or Africa.
But it faces the persistent challenge of widely accepted piracy in the region, and users in countries like Egypt and Morocco that don’t have credit cards. The entire Middle East and North Africa region generated a paltry $19.6 million in total revenues in 2019 ($17.7 million from streaming), though it rose 18.5% from 2018, according to the IFPI.
The company also hopes to confront a supply-demand issue. Of Anghami’s 57 million songs, only 1% is Arab music, even though 50% of the music consumed on the platform is Arabic-language music.
“We need to create more content,” Maroun says. “We need to really help the ecosystem, to co-create content with labels.”