Shares of Anghami, a music streaming platform serving the Middle East and North Africa, are off to a wild start after the company merged with Vistas Media Acquisition Company, a special purpose acquisition company (SPAC), on Friday. Vistas shares closed at $9.83 on Thursday, and then following Friday’s merger and the first day trading as Anghami (Nasdaq: ANGH) shares closed at $12.07, up 22.8%, on low volume.
On Monday (Feb. 7), its second day of trading, shares of ANGH rose 62.5% on over 11 times the trading volume as the prior day. At $19.50, Anghami has a market capitalization of roughly $500 million.
Vistas brought $140 million to the merger: $100 million raised in an Aug. 2020 IPO and $40 million through private funding. After paying $38 million to existing shareholders and $13 million in transaction expenses, $89 million was planned to go to Anghami’s balance sheet, according to a January 2022 investor presentation.
Anghami has a “freemium” model similar to Spotify with both paid and ad-supported tiers. It had 18.4 million active users and 1.4 million subscribers in 16 markets as of 2020, the latest date for which granular information is available, according to a January 2022 investor presentation. Subscriptions accounted for 81% of revenue, of which 60% came from 39 telco partnerships across the MENA region.
Its focus on the MENA sets Anghami apart from Spotify, Apple Music and other services operating in the region. Founded in 2012 in Lebanon, Anghami is headquartered in Abu Dhabi and has offices in Beirut, Dubai, Cairo and Riyadh. It hosts 600,000 tracks of Arabic music and 57 million international songs licensed from leading Arabic labels as well as the the majors, Universal Music Group, Sony Music Entertainment and Warner Music Group. In 2021, it launched a joint venture record label, Vibe Music Arabia, with Sony Music Middle East.
But Anghami is considerably smaller than many of its Western peers, as well as Tencent Music Entertainment and Cloud Village in China. Its 2020 revenue was just $30.5 million of revenue and preliminary 2021 revenue was between $35.1 million and $36.1 million, according to the investor presentation. Its average revenue per subscriber was $2.26 in 2020, less than half that of Spotify 4.40 euros ($5).