Mdundo issues 2024-25 strategy and financial guidance

The company, trading on the Nasdaq Copenhagen in Denmark, had a cash balance of 11 million Danish krone ($1.5m) by the end of May 2024.

In the forecast, the company expects to improve EBITDA (earnings before interest, taxes, depreciation and amortisation) significantly from expected minus DKK6-7m in 2023-24 to minus DKK4-5m, moving towards positive EBITDA.

Mdundo is also replacing its long-term goal of acquiring 50 million monthly active users (MAUs) by 2025 to 40 million by June 2025. This has been informed by the need to limit focus on customer acquisition and shift attention to improving unit economics.

With the company experiencing rapid growth in revenue from paid subscription through partnerships with leading telecommunication companies, it has plans to make subscription business a priority. In the coming year, the company expects to generate total revenue of DKK15-17m, with DKK12-14m coming from the paid subscription service.

The revenue from subscription has grown year-on-year from DKK50 000 (2020-21), DKK1.3m (2021-22), DKK4.4m (FY 2022-23) and a forecasted DKK7.3m (2023-24).

Mdundo said 2023-24 growth must be seen in the perspective of a 68% drop in the Nigerian naira value and a 10% drop in the Tanzanian shilling value against the DKK during the financial year, meaning growth in local currencies from 2022-23 to 2023-24 is expected to reach 169%.

The company has partnerships with leading telcos like MTN, Vodacom, Airtel and Safaricom across its five primary markets in sub-Saharan Africa: Kenya, Nigeria, Tanzania, Ghana and South Africa. The company expects to launch two or three new partnerships in the forthcoming financial year and increase the focus on secondary markets through partnerships.

In terms of users, Mdundo expects to reach 35 million MAUs in June 2024. The company has grown significantly in the past five years from a customer base of 1.9 million MAUs in June 2019, and expects to increase the focus on driving value per user through its paid subscription service in the coming year. As a result of this prioritisation, combined with a decline in the value per user from the free service, it expects a slower growth in the total base and aims to grow the service to 40 million MAUs by June 2025.

Mdundo expects to increase advertising sales activities across key markets and sectors to further tap into the potential of its advertising solutions. For this reason, the firm has hired a country manager for Tanzania and expects to recruit an additional business development manager who will focus on sub-Saharan campaigns from Johannesburg.

Mdundo’s financial outlook in summary:

• Anticipated user growth: Projecting 5 million increase in MAUs from June 2024 to June 2025, aiming at 40 million.
• Revenue growth: Aiming for DKK15-17m, reflecting a 7-42% growth from the 2023-24 financial year.
• EBITDA improvement: Targeting DKK -4 to -5m, an improvement of DKK1-3m from 2023-24.

The company will release its next annual report on 26 September 2024.