While they were students at the London School of Economics and the University of Oxford, a group of Nigerian graduates noticed how hard it was to find data and information about Nigeria, which has Africa’s largest economy. Each of them had different skills that worked well together. Michael Famoroti was an economist, Bode Ogunlana was a software engineer, Abdul Abdulrahim was a data scientist, and Preston Ideh was a corporate lawyer. In 2017, they started a media company to help the West African country get more information and data-driven insights.
Five years later, this startup called Stears is announcing that MaC Venture Capital is leading a $3.3 million seed round. All took part: Serena Ventures, the Luminate Fund of the Omidyar Group, Melo 7 Tech Partners, and the Empowering Economic Growth Foundation (Cascadia). Two years ago, Stears got $650,000 in pre-seed funding, so this news comes at a good time. It was one of 60 startups accepted into the Google for Startups Black Founders Fund 2022 cohort last month. This included some funding that didn’t dilute the company’s ownership.
Mac VC and Serena Ventures fund Nigerian
Stears began as a Nigerian newspaper that focused on financial news and analysis. Its main subscription insights product, Stears Premium, has content like news, opinion pieces, investigations, and deep dives that teach the general public about business and finance, the Nigerian economy, government, and policy. The $100-a-year product was used by a lot of people, especially those who worked in different financial institutions across the country. And because these institutions have more money to spend, Stears changed the product so that businesses could subscribe to their teams. Financial institutions like Sterling Bank and fintech like Sparkle, PiggyVest, and Paystack are among their clients. The company says that its user base has grown mostly on its own, at a rate of about 6.5% per month, doubling in size over the last year.
“We know very well what kinds of information people need. So, we’re focusing on making sure information is spread the same way and building with the customer in mind,” Ideh said in an interview with TechCrunch. “High-value subscription data products, like our own forecast models, are an important part of our business model. On the other hand, the low-value end will be news, so as customers move along the spectrum, their willingness to spend changes.
With the release of Stears Premium and the launch of Stears Pro and Stears Advisory, Stears has become a company that deals with data and intelligence. Stears Premium is driven by macro trends and topics like GDP and inflation. Stears Pro, on the other hand, offers more customized content on topics like market entry, country analysis, and the digital economy. It is used by international organizations like the United Nations Development Programme and the Foreign Commonwealth and Development Office, as well as knowledge workers who need a lot of data for their jobs as analysts, portfolio managers, researchers, and economists.
But, with the help of this new investment, Stears is planning to change its strategy for the Pro product. This is to help the company make the change from an insight company to a data company. Abdulrahim, the company’s COO and a data scientist, says that the data company works with international development and financial institutions to make exclusive datasets that aren’t available anywhere else. So, instead of reporting insights based on the data it finds, Stears wants to collect data, do deep data analysis on it, and give it to its business customers in different formats.
data firm Stears with $3.3M.
“High-value subscription data products are an important part of our business plan.” “As we move forward, we’ll do less custom work for this group of customers and focus more on overall data about the same sector,” Ideh said about the direction Stears is taking with its Pro product. So, the difference in output is that we used to put out reports, but we’ll probably put out data feeds in the future. So, publishing should have fewer predictions and more forecasts about areas that are important to knowledge workers and their organizations. “
Stears Advisory, the product where Stears acts as a consultant and takes on third-party projects related to its main coverage, is being put on the back burner because the company wants to focus more on Pro and Premium. CEO Ideh said that the advisory product, which he compared to a research and development (R&D) arm funded by different partners, lets Stears experiment with data collection and analysis and gives the company a solid foundation on which to build new insights, but it can’t be scaled up and doesn’t bring in the kind of recurring revenue that venture-backed businesses need.
So far, it looks like the company’s plan is working. Now, enterprise customers make up more than 75% of all revenue, up from 45% in 2021. It also thinks that sales will be double what they were last year since half-year sales for 2022 have already topped full-year sales for 2021. This is compared to the 80% growth in revenue from FY 2020 to FY 2021.
As a company that deals with data and intelligence, Stears is in a good place because it has an incentive to work on political projects that would get a lot of attention if it were a media or tech company. In 2019, the company started a project like this when it built Nigeria’s first real-time election database. It was used by more than 2 million Nigerians to keep track of the elections. Ideh said that his company plans to relaunch the election data site before Nigeria’s elections in 2023. This time, the site will have more datasets and features.
At its core, Bloomberg is a data company. We love how they handle elections, and our plan for 2019 was based on how they do it, “said Ideh, who has always said that Stears should build the Bloomberg of Africa. “This is a big step for us in terms of open data, and we’re also excited about polling because it’s a very important way to check data that Nigeria doesn’t have yet. So, during the election period, we will run and distribute statistically representative polls on Nigeria, with a strong focus on data, to find out what the public thinks and get more accurate results.
Ideh says that the seed investment will turn Stears from a Nigerian insight company in v2.0 to an Africa-focused data company in v3.0. The company plans to use the money to improve its data collection and analysis, hire data scientists, data analysts, and sector analysts, and expand into East Africa through Kenya, Southern Africa through the eponymous country, and North Africa through Egypt.
“Africa is where the first people lived, and it is now the next frontier for business,” said Marlon Nichols, co-founder and managing general partner at lead investor MaC Venture Capital, about the investment. “This is a fact that many governments and multinational companies are aware of. They also know that different African countries have different ways of doing business and that most of them are cash-based economies, which means, among other things, that their GDP is understated. Stears is in a unique position to provide the accurate, proprietary data that is needed to open trade with African countries and companies and deepen business relationships with them.
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