Africa-focused music streaming service Mdundo has launched a strategic review as it grapples with what it calls ‘persistent billing challenges’ with the telecoms it has partnered with on paid subscriptions.
The strategic review “could lead to a change in ownership, merger, strategic investor or other consolidation,” Mdundo said in announcing the review on Thursday (April 3), but “there is no guarantee that the strategic review will lead to such outcome.”
The announcement comes a day after the company issued a downward revision of its revenue guidance for the current fiscal year, which ends on June 30.
Mdundo now expects revenues of 11 to 12 million Danish kroner ($1.6 to 1.8 million at the current exchange rate), down from its earlier guidance of DKK 12 to 15 million.
(Mdundo is listed on the NASDAQ First North exchange in Copenhagen, and reports earnings in Danish kroner.)
The company said the downward revision was due to problems with receiving payment from its two largest telecom partners, which account for 75% of its subscription revenue in calendar 2024.
Due to the low penetration of payment cards in African markets, Mdundo has established partnerships with various telecom providers in key markets such as Nigeria, South Africa, and Tanzania, which enables subscribers to pay via their phone bills.
“The partners are still expected to resolve the challenges, but the timeline is unknown. A potential resolution of the situation will have a positive impact on the subscription revenue growth,” Mdundo said in a statement issued Wednesday (April 2).
The company said the new, lower guidance assumes that the issues will not be resolved before the end of the fiscal year, and noted that its guidance on EBITDA and user numbers remains unchanged.
The company continues to expect a negative EBITDA of DKK -4 to -5 million (-$0.6 to -$0.75 million) for the current fiscal year. That would be an improvement over the DKK -6.4 million EBITDA it posted for the previous fiscal year.
It’s also maintaining its target of 40 million monthly users by the end of the current fiscal year, up from the 35 million it reported in the 2023/2024 fiscal year.
For the first half of the current year, ended December 31, 2024, Mdundo reported a 45% YoY jump in subscription revenue, to DKK 4.5 million (USD $0.65 million at the average rate for 2024).
“Since the IPO, Mdundo has strengthened its well-built and scalable platform, grown user-numbers significantly and gained access to a growing subscriber base via partnerships.”
Jesper Vesten Drescher, Mdundo
The company has seen the number of users grow sevenfold since its IPO in 2020.
“Since the IPO, Mdundo has strengthened its well-built and scalable platform, grown user-numbers significantly and gained access to a growing subscriber base via partnerships,” Mdundo Board Chair Jesper Vesten Drescher said.
“On this basis, it is natural for us to analyze the next steps in the company’s strategic development and as such we have initiated a strategic review of Mdundo’s options to utilize the existing platform even further.”
The company hasn’t set a timeline for the review.Music ComeOn
