Serena Williams’ Firm, Invests $3.3m in Nigerian Data And Intelligence Company, Stears

Serena Williams’s venture capital firm is backing Nigerian data and insights firm Stears Inc. in a $3.3 million seed round led by MaC Venture Capital.

The investment is one of just a handful in Africa for Serena Ventures, whose founder announced that she would turn more of her attention to investing following her retirement from tennis after the US Open in September.

“One of the main reasons I invested in Stears is not because of my love and appreciation for Africa, but because Stears has strategically thought of how to increase the investment community on the continent,” Williams said in an emailed statement. “They’re aware of the complexities and have leverage with data and technology and I truly respect what they’re doing.”

Stears, based in Lagos, offers data collection, production, advisory and analysis services. Its products include Stears Insights, the company’s flagship digital publication, which provides analysis-driven content to its subscribers.

MaC contributed $2 million as the lead investor in the round, according to Stears co-founder and Chief Executive Officer Preston Ideh. Other participants in the round included Melo7 Tech Partners LLC, Cascador, Hoaq Club and return investor Luminate Fund of the Omidyar Group. Stears declined to provide valuation information.

The company has grown thanks to paid subscriptions, making it a rare subscription success story in Nigeria, where consumers are generally unaccustomed to pay walls for information.

The Stears round comes in a year that has been a historic high for African startup funding. Even so, early-stage African companies tend to raise less than their US counterparts, according to data compiled by Bloomberg. The median investment for African seed rounds this year is $2.6 million, compared with a median of $4.5 million in the US.

Stears was launched in 2017 by four co-founders who met during secondary school at Loyola Jesuit College in Abuja, Nigeria, and at the London School of Economics and Imperial College in the UK.

The company plans to use the new funding to expand its coverage geographically by establishing a presence in East and Southern Africa, Ideh said. In addition, Stears will expand its product breadth beyond insights to data, deepen data partnerships, and collect its own proprietary data, to which it will license access, he said.

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While it started as an online publication, Stears now considers its main competitors to be other data and intelligence providers, Ideh said in an interview. Some Stears readers rely on its Insights product as an alternative to Bloomberg News and other information services. The company plans to launch a service for proprietary data on Africa that will compete more directly with Bloomberg LP, according to a statement from the company.

Stears said in a statement that its user base has grown at around 6.5% month-on-month, doubling the company’s number of users over the last year. Enterprise customers make up more than 75% of revenue, up from 45% in 2021. The company said its revenue in the first half of 2022 surpassed that for all of 2021.

Its largest institutional clients — accounting for 90% of enterprise revenue — are international organizations such as the European Investment Bank, United Nations Development Programme and the UK’s Foreign, Commonwealth & Development Office, all of which use Stears to collect or analyze data. The remaining 10% of enterprise revenue comes from Nigerian companies’ corporate subscriptions.

Stears uses its data and analysis skills to produce interactive visualizations. Stears created Nigeria’s first real-time election tracker, which it says drew 2 million unique users during the 2019 general election cycle and attracted widespread readership and investor attention to the main site.

While Stears’ coverage currently concentrates on Nigeria, it plans to eventually have a continent-wide focus.

“Our mission has always been to be the world’s most trusted provider of African data and insight,” Ideh said.

The new financing brings Stears’ total cumulative funding to $4 million, following a 2019 pre-seed round led by Omidyar Group’s Luminate Fund.

The investment is the ninth in an African firm by MaC, whose co-founder and managing general partner Marlon Nichols is joining the Stears board.

“Data is a huge business, and I think Stears has figured out a unique process of acquiring and analyzing data, and also visualizing that data in a way that really resonates with both companies and governments,” Nichols said in an interview.

Serena Ventures fought “tooth and nail” to get into the round, which was challenging because it came together in September when Williams was playing in the US Open, said Alison Stillman, the firm’s founding general partner.

Most of the firm’s previous African investments have been in financial technology companies. Stillman said that Stears data products would prove valuable to her firm and others hoping to invest more in Africa.

”We have this whole thesis about how important Africa and the ecosystem is going to be,” she said. “But we also know that data is really hard to find right now.”

Bloomberg