Nigerian media startup raises $600k seed to build Africa’s Bloomberg

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Stears, a digital media and information startup known for providing access to high-quality information in Nigeria, has raised a seed investment of $600,000.

The seed round was led by a Nigerian-based fund with participation from Luminate, a philanthropic organisation which is a part of the Omidyar Group, and another unannounced local venture capital firm.

In 2017, Stears started out in the London School of Economics as a media publication focused on financial news in Nigeria.

Led by Preston Ideh, Abdul Abdulrahim, Foluso Ogunlana, and Michael Famoroti, the publication pivoted into the information services industry after observing the challenge of finding high-quality sources of information across Nigeria and realising the impact that an advertising-driven revenue model could have on editorial independence.

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The three-year-old startup currently owns Stears Business, a niche media publication focused on economics, finance, and policymaking in Nigeria, as well as Stears Data, its data collection, research, and analytics division.

The Stears Business website
With the investment, Stears will be acquiring talent, continuing data collecting, exploring new business models, and launching CoreData, a digital data platform that enables governments and corporations access economic and demographic data on a sub-national level across the country, in June 2020.

Techpoint caught up with Preston Ideh, the chief executive officer, to find out how far the team has gone, what the raise means for the startup, and what the Nigerian information and data space should expect from them.

What problem did you and the team intend to solve by starting Stears?

To be honest, the problem has changed over time but at the very beginning, what we understood was that there was an information gap across the continent. We were working to figure out what the best solution was that we could come up with to fill the information gap.

And seeing media as a subset of that information market, we decided to launch Stears Business—a media platform that can provide high-quality information to anybody, anywhere, at no cost.

This essentially guided all our intentions, growth, and strategies and since then, we’ve evolved. So, now I’ll say our goal is to make it easy for anyone, anywhere in the world to access high-quality information on Africa.

Three years in, would you say Stears is on track to achieve its goals?

I’d say we are. I’d also say that the coronavirus pandemic might have plans of its own because the world has definitely changed and we’re not immune to the events going on in the world.

This year, no one knows how it’s really going to pan out but I’d say that so far, in terms of being on track, launching, surviving, up to this point, we have definitely achieved part of what we thought we would achieve by this time.

To raise seed funding of $600,000 as a media startup is quite rare in these parts, would you say Stears is doing something right?

[Laughs] This is almost a rhetorical question because once I take your assumption, I think it would imply that we’re doing something right. But I think at the core of it all, what we’ve been able to do especially while working with investors and partners is basically ask ourselves what kind of company we want to design to solve the problem that traditional media companies try to solve.

Once we did that and did not take traditional media assumptions like reliance on advertising, I think it allowed us to build something with a more distinct business model and the introduction of Stears Data into Stears’ business model fundamentally changed that.

L-R: Abdul Abdulrahim (Co-founder & CIO), Preston Ideh (Co-founder & CEO), Michael Famoroti (Chief Economist), and Foluso Ogunlana (Co-founder & CTO)
Another thing that was particularly important based on the conversations we had with investors was churn in the sense that advertising-driven business models have an impact on editorial independence and churn. So our ability to not rely on advertising revenue and build a business without ads has encouraged our investors and allows us to still remain a trusted source of information.

Stears plans to use the funding to build a demographic database in Nigeria, what does this mean for the media and data space in the country?

First of all, I think it means someone is paying attention. The conversation around data in Nigeria and Africa has always been that there isn’t a lot of data and information available and I agree with that. However, we believe the data present has not been mined to its full potential.

Now, what we are able to do is bring together people with different skill sets to key into the information that is currently available. For example, we have in our team journalists, analysts in consulting, economists as evident in our previous two editors-in-chief, engineers, and data scientists. And what we’ve found is that they come up with more innovative ways to collect, structure, analyse, and distribute data that is not in the public domain.

I’ll also add this. If you look back at what we’ve done in the past with the election centre we launched during the 2019 general elections in Nigeria and also what we recently put out around this COVID-19 period, the only reason we’re able to do such ambitious projects is because we have that data built within the team. So, I think the funding affects the data industry in that we’re bringing more focus and the media industry in that we’re essentially tackling more ambitious or bolder projects.

Why do you think this is a good time to raise money seeing we’re in the middle of a global crisis?

Every Nigerian company understands the importance of survival. Right now, surviving COVID-19 is probably the priority for most businesses irrespective of the sector they play in. For us, raising money is still about survival.

The Stears team
We’re not being complacent in any way and we still have to run lean operations like any other company this period. Having a view of the world that is a little bit more long-term than whatever the duration of COVID-19 is going to be, is one of the reasons we raised and it allows us to focus on perhaps more long-term projects.

With the impact of the coronavirus pandemic on the Nigerian economy becoming evident, what do you think the future holds for Nigerian media companies?

Recently, there have been lots of conversations on the implication on media companies and unfortunately, the research that we have come across tends to come from a more global outlook to Western companies that have different business models.

I think media companies, generally, will be forced to diversify their revenue streams. It’s ironic because one of the ways many media companies diversify their revenues is via events but that’s off the table now. So, we are left with figuring out how to create a maximum amount of value from our readers.

Media companies need to be asking themselves these questions in the midst of this crisis: “Who are the people that definitely want to get their products out there? Who are the people that are still selling? And essentially, they need to figure out ways they can create value for these people as advertisers. At the core of it, I believe if media companies are able to produce quality content and create value for their readers at a time like this to the extent that they can, they will essentially support or back you.

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