In the past few days, it was announced that Anghami, the leading platform in the Middle East and North Africa in the world of music, has been launched for public subscription, through its merger with the acquisition company Vistas Media Acquisition Company (VMAC), becoming the first Arab technology company to be listed on an exchange Nasdaq in New York. So how did Anghami's music journey make it to the stock exchange?
When Anghami started, there were no music streaming service providers in the area, as most of them had not yet arrived. The company turned this issue into an opportunity, by spreading the culture of music broadcasting, and educating institutions and users about this matter, which made it establish and establish its feet as a leading platform in this field.
There is more than one competitor to Anghami, including, of course, similar providers such as Spotify, Deezer, and YouTube. The company is also facing fierce competition with piracy, as many users resort to illegal services, which makes the percentage of potential users of Anghami less.
Anghami was able to deal with this matter, as its services were not limited to broadcasting music only, but it also provided other services such as: podcasts, direct radio, and exclusive concerts, thus enabling it to attract users who are looking for these services, and benefit from the great spread of Anghami in the region.
The company also strives to provide its services in accordance with the users and their capabilities. Those with limited internet access can get high-quality broadcasting, in addition to customer service that provides quick solutions to customer problems. The company provides a part of its services to users for free, in exchange for making profits from them through the advertisements that appear to them while using the service.
As for Anghami Plus subscribers - who pay for their subscription - they get a set of other features, including downloading songs and playing music in offline mode, as well as displaying lyrics, and other services, without ads appearing to them during that, which gives them complete freedom in use.
When Anghami started her business, she was seeking to raise $2.2 million to start the business, but she did not get approvals to do so. On the contrary, most of the responses were disappointing for the company, as it was not convincing for investors. Finally, the company successfully secured its first investment of $1 million, which is less than half the value it had targeted to get started.
Despite this, the company was able to manage its affairs appropriately during this period, by focusing on priorities, and the team’s reliance on itself in most matters, which gave them confidence in their performance, and made them more convinced of the project, and their ability to manage it even with a lack of capabilities.
At the same time, the company learned to focus and direct its efforts towards generating revenue. Perhaps this is what prompted the company not to listen to investors' requests for the development of the user segment, and its continuation on the way to achieving revenues, so as not to face any financial crisis.
From the beginning, the company succeeded in securing 7 financing rounds, the last of which was the company through which the company adopted the decision to offer in the stock exchange. The value of this combined round amounted to 40 million dollars: 30 from the UAE Shuaa Capital Corporation, and 10 from Vistas Media Capital in Singapore (the parent company). for VMAC care). Anghami is expected to have approximately $142 million in cash on its balance sheet at closing.
The merged company will operate under the name Anghami, and will trade under the new symbol “ANGH.” The transaction is expected to be completed in the second quarter of this year, and the shares will be offered for trading in June. The reason for listing on the NASDAQ is that it allows companies to be listed on the NASDAQ through the Special Purpose Acquisition Company (SPAC) method of merger.
A special purpose acquisition company is a company that does not have commercial operations, the objective of which is to raise capital at the first offering, with the aim of acquiring existing companies, also known as “blank check companies”.
The popularity of these companies increased in the past years, as they succeeded in attracting more investors to them. In the last year since the beginning of August, more than 50 special purpose acquisitions companies have been formed in the USA, and have raised about $21.5 billion.
In our case, the acquiring company is Vistak, and the incumbent company is Anghami. The initial value of the combined institution is $220 million, which is 2.5 times the estimated revenues of Anghami in 2022. It becomes the second Arab company to be listed on the Nasdaq after Aramex, and the first technology company to do so.
Offering on the stock exchange is one of the exit options that startup companies resort to, whether by company owners or investors. Of course, the reasons for each differ, but the desire is the same; Assignment of ownership shares currently owned to other parties.
There are some additional options for exit, such as: the complete acquisition of the company by another company, as Amazon did with Souq, and Uber with Careem. The investor can also exit by selling his shares to a larger investor, or by redeeming these shares from the company's owners, and paying the assessed value for them now.
Anghami’s move to the stock market seems promising for other technology companies, because it offers us a unique and perhaps inspiring experience for many company owners, that they can reach their dreams to the furthest points, and that a simple, well-planned idea may be the perfect opportunity for success.
Last Updated: 03/22/2021AppsStartupsMusic
