While studying at the London School of Economics and the University of Oxford, a group of graduates noticed how difficult it was to get data and information about Africa’s largest economy and their home country, Nigeria. Each had different but complementary skills – Michael Famorotican economist; Bode Ogunlanaa software engineer; Abdul Abdulrahim, a data scientist; and Preston Ideha corporate lawyer – and in 2017 they launched a media startup to address the lack of information and data-driven insights in the West African country.
Five years later, this startup, Stears, announces a $3.3 million starting round led by MaC Venture Capital. Serena Ventures, Luminate Fund of Omidyar Group, Melo 7 Tech Partners and Cascador (Empowering Economic Growth Foundation) participated. This news comes two years after Stears $650,000 raised in pre-seed funding. It was last month one of 60 startups to be accepted into the Google for Startups Black Founders Fund 2022 cohort, which included some non-dilutive funding.
Stears started out as a media publication focused on financial news and insights into Nigeria. Its flagship subscription insights product, Stears Premium, features content ranging from news and opinion pieces to investigative pieces and deep dives, educating the general public on matters of business and finance, economics, government and policy in Nigeria. The $100-a-year product was widely used by consumers, especially employees working in various financial institutions across the country. And because these institutions have more purchasing power, Stears then tailored the product to companies that wanted to subscribe on behalf of their teams. Some of its subscribers are financial institutions such as Sterling Bank and fintechs such as Sparkle, PiggyVest and Paystack. The company says its user base has grown mostly organically at about 6.5% month-over-month, doubling its total user base in the past year.
“We have a good understanding of the kind of information people need. So our focus is on standardizing information dissemination and building with the customer in mind,” Ideh told londonbusinessblog.com in an interview. “A vital part of our business model is the marketing of high-quality subscription data products, for example proprietary forecasting models. Conversely, the end of the low value will be news, so customers’ willingness to spend changes as they move down the spectrum. ”
The iteration of Stears Premium, alongside the introduction of other products Stears Pro and Stears Advisory, has transformed Stears into a data and intelligence company. Macro trends and topics like GDP and inflation are driving content on Stears Premium. Stears Pro, on the other hand, provides more tailored content around specific issues such as market access, country analysis and digital economy for international organizations such as the United Nations Development Programme, the Foreign Commonwealth and Development Office and the knowledge workers – people need a a lot of data for their work, including roles as analysts, portfolio managers, researchers and economists, working in them.
But in an effort to support the transition from an insights company to a data company and supported by this new investment, Stears is planning a strategy shift for the Pro product. According to the company’s COO and data scientist Abdulrahim, the data outfit works with international development and financial institutions to produce proprietary and exclusive data sets that exist nowhere else. Therefore, instead of reporting insights from the data it collects, Stears wants to collect data, perform in-depth data analysis and present it to its enterprise clients in various formats.
“A key part of our business model is bringing high-quality subscription data products to market. And as we move forward, we will do less customization for this group of customers and focus more on general data around the same industry,” added Ideh, on the direction Stears is taking with its Pro product. “So the difference in output is so great that in the past we released reports, but in the future we will probably release data feeds. So less text-heavy way of publishing and more forecasts and predictions about sectors that matter to knowledge workers and their organizations.”
Stears Advisory — the product where Stears wears its consulting hat and takes on third-party projects around its core coverage — is taking a back seat as the company plans to double down on Pro and Premium. CEO Ideh explained that while the Advisory product, which he likens to a research and development (R&D) arm sponsored by several partners, allows Stears to experiment with data collection and analysis and provides the foundation for further insights, the is not scalable and lacks the kind of recurring revenue that venture capital backed companies need.
So far, the company’s strategy seems to be paying off. Enterprise customers now contribute more than 75% of revenue generated, up from 45% in 2021. It also expects revenues to double from last year, as half-year revenue for 2022 already exceeds full-year revenue surpassed for 2021. This compares to the 80% revenue growth between FY 2021 and FY 2020.
As a data and intelligence company, Stears is well placed where it is encouraged to pursue political projects that would grab attention if it were a media or technology company. In 2019, the company embarked on such a project when it developed Nigeria’s first real-time election database. More than 2 million Nigerians used it to monitor the general election. Ideh said his company plans to relaunch the election data site, this time with more data sets and functionalities, ahead of Nigeria’s 2023 elections.
“Bloomberg is a data company at its core; we love how they approach elections and our approach in 2019 was driven by them,” said Ideh, who has always been vocal about Stears building the Bloomberg of Africa. “This is a big open data effort for us and we are also excited about polls because it is a very important form of data verification that is currently lacking in Nigeria. And so we will conduct and release statistically representative polls on Nigeria during the election period, using a strong data mindset, to get a sense of public opinion and get more robust results.
According to Ideh, the seed investment will take Stears from a v2.0, a Nigerian insights company, to a v3.0, a data company focused on Africa. The company plans to use the investment to enhance its data collection and analytics capabilities, hire data scientists, data analysts and industry analysts and expand into East Africa through Kenya, Southern Africa through the eponymous country and North Africa through Egypt.
“Africa is home to the first humans and is now the next frontier for business,” said Marlon Nichols, co-founder and managing director at lead investor MaC Venture Capital about the investment. “Many multinational companies and governments understand that this is a reality. They also realize that several African countries are subject to unique business processes and are primarily cash-based economies, resulting in, among other things, undervalued GDP. Stears is uniquely positioned to deliver the proprietary and accurate data needed to unlock trade and deeper business relationships with African countries and companies.”