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Smart Starts

The Light
Shines In
The Cloud

Startups in Lagos are transforming Nigeria's capital city, and IBM Africa is helping them achieve their dreams.

With a population of 21 million people, Lagos has become one of the 10 biggest cities in the world. The Nigerian megacity has been growing at an exponential rate, and if it continues at its present pace, it could soon have more residents than all of Great Britain within several decades. With the explosion in the country's population comes a boom in its internet users, with up to six million users every year. As more people get up to speed online, ambitious entrepreneurs have been starting up companies offering a wide range of useful services needed throughout the country. Currently, it's estimated that there are anywhere between 450-700 startups across Lagos, in what has become known as the 'Yabacon Valley.'

Climbing To New Heights In
Nigeria’s 'Yabacon Valley'

Though it's no match for Silicon Valley in terms of overall scope, Lagos-based startups are currently worth an estimated US$2 billion, the most in all of Africa. This year alone, tens of millions of US dollars in mostly foreign investments have been helping to support the dreams and ambitions of many Nigerian entrepreneurs. These entrepreneurs are well educated, as an estimated 93 percent of Lagos based founders have a technical background. This is the third highest concentration in the world. However, despite a growing amount of seed money and know-how, four out of every five startups in the country fail within the first three years.

Obiweluozor Agu and Chike Ilonuba are two business owners in Lagos who are determined to succeed. Their company, called BOCA Konsult Global Services Ltd., was formed in 2015 following the privatization of Nigeria's power supply industry. Traditionally, Nigerians either waited for their electricity bill at the end of the month to make a payment, a process known as post-paid, or purchased an energy token for a set period of time, a process known as prepaid. In the latter case, after purchasing the token, customers input a 20 digit number into their meters in order to get access to daily electricity. However, the payment process was inefficient, as many customers were literally left in the dark if their bill wasn't paid. Many companies in that sector have wanted to improve their payment services so customers who work during the day could pay for their bills after hours, without having their power cut off.

"For customers who have prepaid meters, it was a particularly painful experience as your energy token can finish at a time when these cash offices have closed for the day, which leaves you without power until the next day. So, in 2015, we pioneered online vending at one of the electricity distribution companies using one of our flagship products." Obiweluozor Agu, Founder and CEO, BOCA Konsult Global Services Ltd.

They created a product called Lightup, which serves a dual purpose. First and foremost, it is a vendor, so customers can purchase energy tokens via their internet site or app around the clock. It also serves as an aggregator portal, so other vendors can connect to the device and make their own services available. When customers visit the platform, they can select their own electricity company, supply their address details, make payments and receive their energy token in one smooth process. Lightup is now directly integrated into the database of the main electric companies for a streamlined process. BOCA believed what they offered was better than existing services that were available at the time, which they perceived to be erratic and not user-friendly for consumers. However, as a young, emerging startup in Lagos, they experienced situations where customers either could not access their services, or their server resources were maxed out due to overuse. In order to solve these issues and grow their reputation to win new business, they sought out IBM's Cloud Based Services.

"We never had a real-time support system where you could chat with user support personnel as we currently do at IBM. This level of support ensures that issues are sorted out fast. This is a great improvement from what we had, and the difference in resolution times plays a huge role in platform stability." Obiweluozor Agu, Founder and CEO, BOCA Konsult Global Services Ltd.

The IBM Cloud - Technology
With A Clear Vision

What attracted BOCA to IBM Nigeria were the comprehensive offerings the company presented during personalized 'deep dive' sessions. While consulting at IBM Nigeria, the principles at BOCA learned about IBM's Cloud Services, which offer a wide range of infrastructure and platform solutions. These include technological areas such as Artificial Intelligence, Internet of Things, Blockchain, DevOps and other services.

"Nigerian startups leverage our platform to create solutions which address a wide range of industries and needs," says Dipo Faulkner, IBM Nigeria Country Manager. He cites the Watson Conversation service and IBM Watson's speech-to-text (and vice versa) capabilities as just two of the many ways that IBM Cloud Services can provide customer-oriented solutions for the local market.

"The IBM Cloud has evolved in a very short time from being a way to cut costs, to a platform for business transformation and innovation."Dipo Faulkner, Country Manager, IBM Nigeria

Through the Cloud Service and continued consultations with IBM Nigeria, the team at BOCA were taught how to be open with clients about the services they offer, and how to be receptive to what their customers needed, as well as pricing. They also started using four virtual IBM Cloud servers, in addition to a combination of security gateways and software, platforms and infrastructure as a service. Continued time spent at the state-of-the-art IBM Innovation Client Center enables them to engage in ongoing strategy sessions and training sessions at no additional cost.

"We seek to build long lasting relationships with our clients by making significant efforts to understand them and their unique situations. This is a key tenet at IBM and fundamental to our engagement process."Dipo Faulkner, Country Manager, IBM Nigeria

Once Past The Startup Stage,
a Brighter Future Awaits

Without access to the required technology, the team at BOCA doubts they would still exist today. Among the many issues and challenges they faced were regular DOS (Denial of Service) attacks by online hackers who targeted their servers and made it difficult to operate smoothly. But since seeking out IBM Africa, the brand association has attracted several clients. It's also boosted their profile, enabling them to be recognized across all of Nigeria's 36 states as a company that can be trusted. Financially, BOCA processes 350,000 transactions on a monthly basis that are worth over US$4 million, a figure that is expected to quadruple by the end of 2019. "Since we started using IBM Cloud, we have not experienced a single downtime, a DOS attack or the inability to upgrade server infrastructure because of overpriced components," says Agu.

In the near future, BOCA is even looking at ways to use IBM's Blockchain technology to further strengthen their payment solution offerings.

"IBM has been able to take away the burden of infrastructure from us as a startup. This has helped us focus more on business development and marketing of our new solutions."Obiweluozor Agu, Founder and CEO, BOCA Konsult Global Services Ltd.

As Nigeria's active startup scene attracts more and more attention both locally and globally, IBM Africa has also seen a notable increase in companies seeking out their services for innovative solutions, in addition to a sense of security, reliability and dependability. Such a solution is enabling startups like BOCA transform from struggling companies into thriving ones. "IBM expects the upward trend to continue because there has been a lot of interest and there has been significant growth in the sector," says Faulkner.

"Success stories give credence to the potential that exists here. Nigeria is well positioned to become a hub for Africa based on the size of its population, the demography that falls within the startup/innovator segment and, of course, the investment, which will likely continue to improve."Dipo Faulkner, Country Manager, IBM Nigeria