The Mdundo model was initially to help sell local artistes’ music using scratch cards, in a bid to increase the revenue that reaches music makers, who currently earn barely 20 percent. Yet this model has changed.
Speaking to HumanIPO, Mdundo’s Gustav Erickson said that the startup had already sealed a deal with Airtel Kenya which will see the mobile services provider print the scratch cards for the artists at no cost.
“The reason that they are doing this is so that they can brand the back side of the cards with their logo, hence associate themselves with local music, something that will see them increase their customer base,” Erickson said.
With Airtel doing the corporate branding, it incurs all the costs, thereby creating a “negative acquisition cost” for Mdundo since Airtel pays for the package.
Erickson further revealed that Mdundo has signed a deal with Samsung that will see them print over 2,000 cards for the global electronics maker, as it launches a new Samsung handset later in the year in Kenya.
Launched back in September this year, Mdundo is among the startups in 88mph’s three-month accelerator program. At the end of the period, the startup will be
among those presenting at the Demo Day to potential investors on December 13 2012.
As at November this year, Mdundo has already signed up 50 of Kenya’s top musicians, and is now targeting the gospel musicians and other music genres like rock.
“We are looking to break even by August 2013, if we get the investment that we are looking for. We are looking for an investment of up to US$500,000 for a 25 percent stake of Mdundo,” Erickson added.
Erickson said that, with time, Mdundo could be the one stop platform for Kenyans to access the latest music from their favourite musicians, with the company viewing expansion across Africa and the rest of the world.