The music technology company has bold plans for the future, boosted by its recent public listing on Nasdaq. Shanny Basar reports.

In February, Anghami, dubbed ‘the Middle Eastern Spotify’, became the first Arab technology company to list on Nasdaq. Co-founder and chief technology officer Elie Habib has a vision of the next megahit, along the likes of ‘Despacito’, coming from the Middle East. Despacito set a record as the most-streamed song just six months after its release in January 2017 and three years later it reached seven billion views on YouTube.

“The biggest concert in the world was in Saudi Arabia in December 2021, not Coachella, and we want everyone to realise that the Middle East has a vibrant and growing music scene,” says Mr Habib.

He and co-founder Eddy Maroun launched Anghami in 2012 in Beirut, Lebanon, as the first streaming platform in the Middle East and north Africa (MENA) to offer legal music. In 2021, Anghami relocated its headquarters to the UAE with the support of the Abu Dhabi Investment Office, which partnered with Anghami as part of its Innovation Programme. It now operates in 16 countries across MENA and has more than 75 million registered users.

Powerful partner

During the Covid-19 pandemic, the founders realised the power of public currency in enabling them to follow through on their growth plans, and be strongly positioned for the future. They originally intended to complete a private fundraising, meeting with multiple investors on Zoom, including Vistas Media Acquisition Company (VMAC), the special purpose acquisition company (SPAC) led by co-CEO and board member F Jacob Cherian and co-founders Saurabh Gupta and Abhayanand Singh. The SPAC had raised $100m in its August 2020 initial public offering (IPO) on Nasdaq.

“The whole concept of a SPAC was new to us,” says Mr Habib. “We thought it made sense because VMAC has experience in movies, media and entertainment, and understands the importance of differentiated, tailored entertainment content.” 

SPACs are shell companies that are set up with the sole purpose of acquiring a privately-owned company and taking it public via the merger – a more flexible and less burdensome route than a traditional IPO. VMAC and Anghami announced they had entered into a definitive merger agreement in March 2021. VMAC stockholders approved the combination in January 2022 and Anghami began trading under the symbol ANGH on February 4, valuing the company at $220m.

SHUAA Capital was financial advisor to Anghami and global underwriter. The UAE-based asset management and investment banking firm had led a funding round for Anghami in early 2021 and made a private investment in public equity (PIPE) commitment of $30m, on top of a $10m commitment from Vistas Media Sponsor. PIPEs allow private financial investors to acquire minority stakes in a SPAC at a discount to the market price of the shares to underpin the financing of its business combination. In Anghami’s case, asset manager Franklin Templeton was also one of the pre-IPO investors and invested in the PIPE. Truist Securities was financial and capital markets advisor to VMAC, with Benchmark and I-Bankers Securities as financial advisors.

“People want local content, but there are not many content creators or companies investing in that kind of local talent,” says Mr Habib. “This is why we are focused on accelerating our flywheel by jumping into production and creating the product or content our market demands.”

A model to follow

Only 1% of Anghami’s songs are in Arabic but they constitute about half of its one billion monthly streams. Anghami’s goal is to increase Arabic content to 2% of its approximately 72 million songs in the next two years by giving artists more opportunities to create content that is monetised.

Anghami hopes its listing will inspire the creation of more start-ups in the region and encourage more investors, once they see that exits can happen more frequently. MENA venture capital firms and strategic shareholders, including media groups and telecommunications companies, collectively owned approximately 68% of Anghami, with the balance owned by the founders.

We will explore the possibility of listing in the region in due course because it makes sense for us

Elie Habib

The company also wants to inspire other businesses to go public as a means to grow. In December 2021, Anghami launched Shagaf, a podcast about Saudi and Arab women in business, tech, start-ups and entrepreneurship hosted by Emon Shakoor, founder and CEO of Blossom Accelerator, Saudi Arabia’s first tech-inclusion and female-focused accelerator. Mr Habib is confident that many companies in the Middle East will follow Anghami’s example and go public in the next decade. “We will explore the possibility of listing in the region in due course because it makes sense for us,” he adds.

Just the beginning?

In 12 months, Anghami expects significant growth due to the firm’s access to capital and Mr Habib believes Anghami has only scratched the surface of pushing streaming in core markets. “Abu Dhabi has been named a capital of music, so we are on the cusp of something that’s never been done before,” he says.

In December 2021 Sony Music Entertainment Middle East, VMAC and Anghami announced the launch of Vibe Music Arabia, a joint record label for independent Arabic artists to spotlight emerging music across the region and maximise its reach.

“The Middle East is a region that can grow, but only if we pay the right price for music and for artists,” adds Mr Habib. “We can grow and they will grow, when people start to understand that music and talent are not free.”

Over 10 years, Anghami’s vision is to be the leading music-focused entertainment platform in the Middle East. As Mr Habib says: “We believe the Middle East deserves to have a new media giant.”


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