Eddy Maroun (left) and Elie Habib, co-founders of Anghami, ring the opening bell of the New York Stock Exchange on Feb. 3. (Credit: DR)
On Feb. 3, Eddy Maroun and Elie Habib, co-founders of the Lebanese streaming platform Anghami, rang the opening bell of the New York Stock Exchange, marking their company’s listing on NASDAQ.
It was the symbolic kickoff for a historic event, the culmination of “a long journey,” and the beginning of a “new chapter” in Anghami’s history, Maroun said at the time.
The five or six-person startup first launched at the end of 2012 has grown into a thriving business with 180 people on board. After eight rounds of investment, Anghami managed to raise $54.3 million.
With more than 70 million users and almost 1 billion tracks played per month, Anghami has become a regional pioneer in music streaming, claiming 58 percent of market share.
The brainwave
The story began in early 2011, during a day of skiing at Lebanon’s Mzaar-Kfardebian resort, when Maroun had a problem synching music on his iPod and could not access his music files.
Passionate about music, the future Anghami CEO worked at the time for PowerMeMobile — a Lebanese company offering content for mobile operators — recording minimalist instrumental covers of pop songs on his synthesizer, which the company would then market.
That day, Maroun discussed his mishap with Habib, then PowerMeMobile’s co-founder and chief technology officer. Eureka! The brainwave was born.
The two friends met “almost every day at the Starbucks cafe at ABC mall Dbayeh, to discuss the different ideas and put a plan in place,” recalled Habib, who’s now Anghami’s chief technology officer.
Habib was no stranger to online services. He had contributed to the development of Naharnet, a Lebanese online media resource launched in 2000, where he served as CTO before co-founding PowerMeMobile.
At the time, no legal streaming or downloading services were available in the region, and piracy reigned supreme.
Though the risks were high, the two entrepreneurs took the plunge anyway, investing $200,000 of their own money and taking out a loan worth $400,000 from Kafalat, a company that provides loan guarantees from commercial banks for small and medium-sized enterprises.
Less than a year later, at the beginning of 2012, Anghami was able to raise its first $1 million from the venture capital firm Middle East Venture Partners — a crucial step that allowed the startup to partner with some major international record labels (like Universal, Sony, and Warner) as well as big regional players, including Rotana, Platinum, Mazzika and Melody, filling its music catalog with millions of tracks.
Anghami also managed to sign an exclusivity agreement with Rotana, which allowed it to offer 40 to 50 percent of the Arabic music available at that time.
The contract allowed Anghami to distribute its music catalogs in Lebanon, Saudi Arabia and the United Arab Emirates.
“The investment was huge: $600,000 a year over three years,” said Walid Hanna, CEO of the venture capital firm MEVP, at the time. “But it was key to success.”
The windfall
Originally the Anghami team had wanted to develop a web-based platform with chat rooms where users could discuss music, but they quickly decided to switch to a mobile application model.
This change of heart was largely due to the fact that mobile applications were very popular, Habib explained.
While this market was more promising, it required more preliminary work, given the variety of mobile operating systems at that time — including iOS, BlackBerry, Android, and Symbian. Today only iOS and Android apps still exist.
Another major advantage of mobile apps is the opportunity to partner with telecoms companies to strengthen the customer base; this was the beachhead for Anghami’s conquest of the Arab world.
“These operators somehow took over our communication and acted as a ‘Trojan horse’ by introducing us to their users, offering them [a chance] to subscribe to our product,” Habib explained.
Up to 60 percent of Anghami’s subscription-generated income comes through customer retention strategies.
The model is simple. Customers subscribe to a specific data bundle to have access to Anghami, wrapping their service fees into their mobile phone subscription — a windfall for a startup in a region where credit card payments were rare and where, according to World Bank numbers, access to, and use of, banking services stood at only 14 percent in 2014.
Maroun and Habib managed to land several agreements with mobile operators, who had been introduced to Maroun and Habib’s work through PowerMeMobile, and who recognized the importance of their strategy.
In December 2012, Orange Jordan was the first telecom company to offer Anghami app benefits with its subscription bundle.
The startup gradually expanded its regional presence and today Anghami has contracts with 42 mobile operators in 20 MENA countries.
Success
Anghami was a success and the numbers proved it. According to a 2016 report by the Wamda media website, the startup had already garnered 30 million users and had built up a music catalog of more than 20 million titles, compared to 1 million four years earlier.
This resounding success attracted foreign competition. At the end of 2018, online music giants Deezer and Spotify stepped into the Arab market. This did not trouble Anghami’s co-founders, who say they already had an in-depth knowledge of regional users’ tastes and consumption. Piracy and free music sharing remained their main concern.
“The arrival of these competitors only helped educate and encourage people to buy music legally, which boosted our business,” Habib said.
Anghami’s paid subscriptions jumped from around 1.2 million in 2018 to 2 million in 2019.
“With [subscribers increasing] more than 60 percent, 2019 was our best year, despite a growing competitive environment,” Habib told Le Commerce du Levant at the time. “There is a lot of potential that can be exploited in the region, which is still in the early stages of music streaming.”
Anghami’s success aroused envy, and buyout offers rained down on Habib and Maroun.
Habib told Le Commerce du Levant that both Deezer and Spotify approached Anghami at the end of 2018. “But we were not interested, he claimed. “Our goal is to show that a local Lebanese company can be as competitive as others on a global level.”
“We started with a small team in Beirut. Today, we have grown and adapted to the Arab market. Six years later, we have the data, the network and the artists.”
According to Bloomberg, Orbit Showtime Network allegedly offered to buy Anghami for $400 million in January 2020.
While Habib would not confirm this claim, he did tell L’Orient-Le Jour that they had received “several purchase offers, including three serious ones, over the past two years.”
Given the potential they see in the region and Anghami’s dominant position, the streaming service’s founders no longer see exiting the game as an option.
“At this stage, it has become important for us to develop ourselves and prove that a local company can be competitive,” Habib said.
Relocating
Both the financial and economic crisis that hit Lebanon in mid-2019 and the COVID-19 pandemic placed the Arab digital giant in a difficult position.
The company’s long-standing headquarters, where the bulk of activities were managed, had been north of Beirut in Jal al-Dib, but as the country went from bad to worse, relocation became necessary.
In 2020, Anghami achieved only 1 percent of its turnover in Lebanon, compared to 6 percent in 2019.
“We are Lebanese,” Habib told L’Orient-Le Jour. “Almost 90 percent of our employees are Lebanese too. For the past eight years, we have been dedicated to the growth of our headquarters and our team in Lebanon.”
“However, we don’t believe that the current circumstances are helping us grow in Lebanon,” he added, noting that “with the banking crisis, it has become impossible for any company to be able to raise funds and develop.”
While the situation was dire in Lebanon, Anghmai could count on other markets to help it recover.
Despite a 10 percent drop in the platform’s traffic with the onset of the pandemic, consumption rates quickly returned to normal, contributing to 2020’s revenue increase of seven percent, reaching $30 million.
But the decision was already made. In early 2021, Anghami relocated to Abu Dhabi in the heart of Hub71 technology center, after receiving funding from the Abu Dhabi Investment Office.
Anghami is now based in the UAE,, but Habib says it hasn’t severed ties with Lebanon.
“We will remain a Lebanese company wherever we are,” Habib said as his company was relocating. “This partial relocation will allow us to continue to hire Lebanese talents. Recruitment continues in Beirut for our other offices.”
A year later, 55 of the company’s 180 employees are based in Lebanon. The rest, many of Lebanese origin, are located in Abu Dhabi, Dubai, Cairo and Riyadh.
Habib believes the move allowed Anghami to meet the challenge — preserving its spot as the leading regional music streaming platform, claiming 58 percent of market share, and achieving $36.5 million in sales in 2021, a 21.7-percent increase over 2020.
Recognition
Immediately after relocating, everything sped up for Anghami. In March 2021, the company announced a merger with Vista Media Acquisition Company, whose founders say it was “formed [to merge] … or similar business combination with one or more businesses or entities in the global media and entertainment sector.” The merger allowed Anghami to quickly raise funds and be listed on the stock exchange without having to go through a long and costly process.
After the merger, the co-founders both held 32 percent of the new entity’s shares; its future listing on the New York Stock Exchange at that time was valued at nearly $220 million.
Almost a year later, on Feb. 3, the deal was sealed. Anghami has become the first Arab tech company to be listed on NASDAQ, which company officials described as a major step toward its goal to distribute and ease access to Arabic music, while expanding its repertoire.
In 2021, Anghami launched two new initiatives. The first, “Live Radio”, allows users to tune in, listen, play music, and interact via text message and audio in real time.
The second would see the streaming platform expand its Arabic-language music repertoire.
“Fifty percent of the traffic on our platform involves Arabic music. However, of the 70 million songs we are licensed to play, only 700,000 are in Arabic; that is to say barely 1 percent of our repertoire,” Habib said.
“The Arab world does not produce a lot of musical content,” he added.
To address this, Anghami partnered with Sony Music Entertainment Middle East (SME) in December 2021 to launch “Vibe Music Arabia,” a record label designed to support independent Arab artists, encouraging them to produce more music.
Anghami does not intend to stop there. Although the music streaming platform admittedly does target a niche market, the company believes it still has a long way to go to reach its full potential.
With the MENA population estimated to be between 450 and 500 million people, only 75 million use Anghami.
The leading music platform intends on retaining the Arab diaspora. While the US and Canada would be the first countries to be targeted, France and England are also high up on the priority list.
Although it is now a web-based platform, Anghami is planning on taking on these markets through mobile operators, its favorite choice.
Just over a month since its listing on the exchange market, Anghami has already signed an exclusive contract with Egyptian singer Amr Diab, the No. 1 artist on the platform in terms of most played songs.
The company’s leaders promise that Anghami is a Lebanese success story that is far from over, as the company promises to make new announcements in the months to come.
This article was originally published in French in L'Orient-Le Jour. Translation by Sahar Ghoussoub.
