Music streaming Spotify is believed to be exploring a potential take-over of its Middle East rival, Abu Dhabi-based Anghami, which went public on Nasdaq through a SPAC in February, sources familiar with the matter told Frankly on condition of anonymity.
“The idea was that Anghami would go public if Spotify showed interest in an acquisition, so a SPAC was proposed to speed up the takeover,” sources said.
A Spotify spokeswoman said by email, “We have no news to report regarding a potential acquisition between Spotify and Anghami,” while Abu Dhabi-based Anghami, which listed on Nasdaq in February, declined to comment.
Anghami, the first Arab tech company to list on Nasdaq, moved its headquarters from Beirut to Abu Dhabi last year, as part of its partnership with Abu Dhabi Investment Office’s $545 million (AED2 billion) Innovation Programme.
It went public in a $220 million valuation through a merger with a special purpose acquisition company (SPAC), a blank-cheque company formed to raised money through an IPO, with the purpose of buying an existing company to take it public.
Anghami’s strength lies in its massive library of Arabia music, having signed a deal with Egyptian star Amr Diab earlier this year to exclusively stream his music. Its strategic partnerships also include a deal with Saudi Arabia’s Rotana, the Middle East’s largest record label, which allows it access to the label’s music.
Rotana’s music was previously exclusive to French streaming service Deezer, in which Saudi Prince Alwaleed bin Talal’s Kingdom Holding and Rotana took a $266.7m stake in 2018.
Deezer which went public on the Euronext Paris exchange through a SPAC this year, with a valuation of $1.1bn. While it is available in 188 countries, it currently has around 16 million active users.
Anghami, which was founded in 2012 by Eddy Maroun and Elie Habib, claims to have 58% of the Middle East’s market share, with 1.28 million paying subscribers and 19.5 million active users as of August this year, according to the company. Spotify, which was founded in 2006 by Daniel Ek and Martin Lorentzon, claims to have over 456 million monthly active users, including 195 million paying subscribers, as of September, according to its website.
Spotify went public on the New York Stock Exchange (NYSE) in 2018 at a nearly $30 billion valuation. It did so through a direct listing as opposed to an IPO, having listed its shares without underwriting from the banks. It claimed its strong liquidity didn’t require it to sell shares to raise capital. It said a direct listing was a fairer way to let the market determine the stock price, and create an equal playing field for employees and investors.