23 July 2013

The story content was provided exclusively for the MENA Private Equity Association, a non-profit entity which encourages the spirit of sharing and aims to foster entrepreneurship in the MENA region.

We hope such views, thoughts and experiences shared by entrepreneurs during their journey towards success will serve as a beacon to future and aspiring entrepreneurs in the region.

Inspired by the success of the music streaming industry in the United States and Europe, two musically inclined entrepreneurs saw the potential for this emerging technology to make its mark among tech-savvy consumers in the Middle East. Speaking exclusively to Zawya, Eddy Maroun and Elie Habib, founders of the Cayman Islands-registered limited liability company Anghami, which has offices in Beirut and Dubai, said the increasing volume of Arabic content coupled with a rapidly expanding population with high disposable income have made Middle East a fertile ground for a start-up music business.

"Having a music background and seeing the real potential of [providing music streaming] service, we decided to launch Anghami, which caters for the [Arab-speaking community] looking for strong Arabic content," said Maroun, chief executive officer of the company, who also has a wide experience in finalizing licensing deals and content supply agreements for mobile content from top artists and labels in the MENA music industry.

Anghami, which received its seed capital from regional venture capital firm Middle East Venture Partners (MEVP), is a mobile app that features licensed content from leading Arabic labels such as Rotana, Platinum Records, Mazzika and Melody. It also features music from major international music companies like Universal, Sony, EMI and Warner and is continuously licensing new content from major aggregators.

Habib claims that since Anghami was launched last year, it has made significant strides to become the leading music app across application stores in the MENA region. It offers the largest music catalogue catering to around 2 million users. Habib, who serves as the company's chief technology officer, was previously involved in creating the infrastructure for AFP-Naharnet, the region's first mobile news SMS and MMS service in Arabic and English.

While they may enjoy an early success, both Maroun and Habib were quick to point out that Anghami's journey was anything but smooth. The executives discuss in detail the company's early days including how external funding helped them realize the potential of their business model.

Could you discuss your business relationship with MEVP? What made them the best partner choice for Anghami?

In August 2012, we raised funds from Middle East Venture Partners (MEVP), which appeared to be the ideal solution because they were a Pan-Arab company with an experienced team that was able to help us in our strategy definition and business development. MEVP went on to invest USD 1 million to Anghami, which was the largest digital music investment ever made in the Middle-East.

What were the challenges you experienced in the early days of forming your business?

Raising funds was the main challenge at the beginning prior to MEVP's investment. Most regional investors were not ready for this type of business, but we did discover that mindset could eventually change and we learned a lot from this experience.

Who are your current industry partners?

We have partnered with major media player MBC Group, which helped Anghami's marketing and media exposure strategies. It featured Anghami in one of its most successful TV shows 'Arab Idol'. We have also partnered with three telecom operators: Orange Jordan, Viva Kuwait and Touch Lebanon for data bundling packages and billing partnerships.

What is your expansion plans going forward?

When we started Anghami, we knew that it would expand to more than mobile, that's why we are currently working on developing additional platforms such as the release of the Web version. We are also actively developing partnerships with telecom service providers across the region. We are also finalizing the Windows 8 version of the app and preparing for its launch. In the future, we plan to introduce new packages and products.

What do you see are the possible challenges that you will face as you seek to grow your business?

We are offering a paid music service to the Arab region, a service dominated by piracy here. One of the main challenges we face is the lack of public awareness about this kind of service. Educating the public will be vital. Label agreements were hard to get at first and this is something that we will probably face again when the time comes to renew deals. Of course, we also have to take in account the changing market conditions, which could influence digital music consumption in the region. Finally, we see the potential entry of international competitors as a major concern that we would have to face.

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Zawya 2013