In MENA, Spotify plays second fiddle to one homegrown platform

This story was republished with permission from The Realistic Optimist, a paid newsletter covering the global startup scene. It was moderately edited to reflect Tech in Asia’s editorial guidelines.

The global music-streaming industry has come to be dominated by a few heavyweights, with Spotify leading the way with a 31.7% market share.

The Swedish company brought its services to the Middle East and North Africa (MENA) region in 2018, yet surprisingly, it’s not dominant in that region.

Anghami co-founders Eddy Maroun (left) and Elie Habib / Photo credit: Anghami

And that’s not through a lack of trying or because MENA isn’t a valuable market. In fact, revenue from MENA’s music industry grew 23.8% in 2022, almost all of the proceeds coming from streaming revenue. This makes MENA one of the industry’s fastest-growing global markets.

Regional player Anghami claimed to have 58% of the MENA market when it went public in 2022 via a SPAC deal.

While that figure may have fallen since, the company – nicknamed “The Spotify of the Middle East” – is a compelling example of how a homegrown player can hold its ground against a new entrant with more resources.

Behind the music

Anghami, which means “my tunes” in Arabic, was founded by Lebanese duo Eddy Maroun and Elie Habib in 2012.

Between the 1990s and 2000s, industry leaders such as Universal, Sony, and Warner were battling online music piracy. In MENA however, independent labels led the music scene.

Digital alternatives were scarce, leaving piracy as the only option. By building a regional equivalent to emerging Western streaming services, Anghami wanted to tackle that problem.

Ten years and several VC rounds after its founding as a MENA-focused music-streaming app, Anghami became the first Arab tech company to list on the Nasdaq in 2022. The firm listed via a SPAC deal with a US$220 million valuation.

See also: Mapping Middle Eastern investors fueling Asian tech firms

As of the first quarter of 2024, Anghami claimed to have almost 1.9 million paid subscribers. However, despite positive financial growth, the company has faced the risk of being delisted on the Nasdaq, as its stock price fell below the required US$1 in October 2023.

Stock market woes don’t reduce Anghami’s merit. Its paid subscriber base and its regional dominance are impressive, especially in the face of well-funded global competitors. What explains this?

Local knowledge pays

Cultural edge

Competition

A different path