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Music streaming service Anghami is close to being listed on the Nasdaq stock exchange in New York by merging with a blank-check company. Image Credit: Reuters

Dubai: Music streaming service Anghami is close to being listed on the Nasdaq stock exchange in New York by merging with a blank-check company, according to people familiar with the matter, setting the stage for one of the biggest investments into a Middle Eastern technology startup in years.

Anghami, Arabic for "my tunes," has been holding talks with Vistas Media Acquisition Company Inc., a special purpose acquisition company set up last year, and a deal may be announced as early as Wednesday, the people said, asking not to be named because the information is private. It would mark the first listing on the Nasdaq in New York by a home-grown Middle Eastern tech company.

High valuation

If the deal goes ahead, Anghami could be valued at close to $300 million, according to the people. The transaction includes a combined $40 million commitment from UAE financial firm Shuaa Capital and the parent of the SPAC sponsor in so-called PIPE - private investment in public equity - financing, the people said.

SPACs are often formed to allow private companies to raise fresh funds to grow and list directly without having to go through the costly and time-consuming initial public offering process.

Representatives for Anghami, Vistas and Shuaa declined to comment.

A successful listing of Anghami would add to a streak of major technology deals in the Middle East that started with acquisitions of local companies by Uber Technologies Inc. and Inc.

Despite the shockwaves of the coronavirus pandemic, regional startups have attracted around $1 billion in funding in 2020, 13% more than the previous year, according to Dubai-based Magnitt Inc.

New Arrival

Anghami relocated its headquarters from Lebanon to the capital of the United Arab Emirates at the start of this year in partnership with the Abu Dhabi Investment Office. It was a coup for Abu Dhabi, which has been courting tech companies and startups as part of its efforts to diversify the oil-dependent economy.

Anghami, founded in Beirut in 2012 by two Lebanese entrepreneurs, has grown to become one of the region's most popular streaming platforms. It delivers about 1 billion streams per month, offering 57 million songs to more than 70 million registered users. With offices across the Arab world, Anghami is vying for regional hegemony with Spotify Technology SA and Deezer SA.

Key shareholders

Anghami's shareholders include regional venture capital firms and strategic shareholders, such as Middle East Venture Partners, Samena Capital, Emirates Integrated Telecommunications Co., MBC Group and Etihad Etisalat Co. who represent around 68% of the company with the rest owned by the founders.

VMAC is led by Chief Executive Officer F. Jacob Cherian, a former associate at JPMorgan Chase & Co., and co-founders Abhayanand Singh, the head of the Singapore-based media investment company behind the SPAC, and Saurabh Gupta, a former banker and co-producer of several films. Vistas began trading on the Nasdaq stock exchange in August after its $100 million IPO.

Anghami last year worked with investment bank JPMorgan to raise fresh capital and explore strategic options as it looked to expand, sources told Bloomberg at the time. More recently, Shuaa Capital also invested in the music platform.