Notes From The Week #34

What’s good my people? Hope we’re all doing well and looking forward to the week ahead. As I finish the final edits of my Big Four series which I’ll be releasing on my YouTube channel in the coming week (subscribe if you haven’t already)—I thought to stay with the investment landscape in Africa. The explosion of Afrobeats has been a popular discussion point but not many conversations have considered it from an investment angle. I take some time to consider why private equity firms may see it viable to invest in the genre.

The Investment Thesis For Mavin Records

Africa is among the most talked about parts of the world for private equity firms looking to invest in emerging markets. Despite the challenges to investing in the various regions within Africa, many economic indicators are pointing in the right direction and some traditional market barriers are being broken down.

Private equity and venture capital investments in Africa soared 66% year over year in 2022 to $7.70 billion, the highest aggregate value for the region in the last five years, S&P Global Market Intelligence data shows. The massive jump was mainly due to the proposed acquisition of hospital operator Mediclinic International PLC, which is valued at more than $5 billion.

As the number of private equity and venture capital entries in Africa has increased gradually so has the diversity of sectors covered. A particular interesting sector that is beginning to receive more attention is the cultural contributions of the continent—particularly when it comes to music.

In January 2019, Mavin Records secured a multi-million dollar investment from Kupanda Holdings, a subsidiary of Kupanda Capital and TPG Growth. Mavin Records was founded in 2012 by renowned music producer Don Jazzy and has since produced some of the biggest names in Afrobeats music, including Tiwa Savage, Korede Bello, and Ayra Starr.

Five months following the above tweet Jonzing World, a subsidiary of Mavin Records, would sign a record deal with Rema. Rema would then go on to release his self-titled debut EP “Rema” which peaked at number 1 on Apple Music Nigeria. Later that year, “Iron Man” one of Rema’s most popular songs from the EP gained more popularity when it was placed on former president of the United States of America, Barack Obama’s summer playlist. Rema has gone on to be one of the most important artists on the Mavin Records roster and arguably is one of the biggest Afrobeats artists. The music video for his song “Calm Down” is the most viewed Afrobeats music video on YouTube with 411 million views.

Investing in Mavin Records can be a viable investment opportunity for private equity firms for several reasons:

1. Diverse Portfolio: Mavin Records has a diverse portfolio of artists and music genres, which allows it to tap into different segments of the music market. This diversity also means that the label is not overly reliant on a single artist or genre, reducing the risk of revenue fluctuations.

2. Growing Afrobeats Market: Afrobeats music is a rapidly growing market, both in Africa and globally. As one of the leading Afrobeats labels, Mavin Records is well-positioned to benefit from this growth, with opportunities to sign and develop new talent, expand its audience reach, and generate more revenue.

3. Investment in New Technologies: Mavin Records has demonstrated a commitment to leveraging new technologies to enhance its business operations and reach more fans. For example, the label has invested in blockchain-based music distribution platforms, which can help to reduce piracy, increase revenue, and improve transparency.

   1. Mavin Global has been an industry leader in leveraging digital platforms like YouTube, Twitter and Instagram, both to reach local audiences and grow significant fanbases among the African diaspora in the US, Europe and UK. This investment will enable the company to strengthen this advantage as it develops brand partnerships that support its artists' values and stories.

4. Strong Management Team: Mavin Records has a strong management team led by its founder, Don Jazzy, who is a highly respected figure in the Nigerian music industry. The label has also attracted experienced professionals from other industries, bringing diverse skills and perspectives to its operations.

With new talents such as Crayon, Magixx and Bayanni emerging and charting their own unique paths, a strong track record of producing superstars such as Tiwa Savage whilst currently managing two of the most successful artists on the scene in Rema and Ayra Starr—Mavin Records looks set up for long-term success. The viability of Mavin Records may prove to provide investors with an example of how investing in the burgeoning Afrobeats scene can provide lucrative returns both culturally and financially.

Until next week. Peace.