According to Gartner, by 2021 more than half of enterprises will spend more on chatbots than mobile apps, speaking to the global relevance of AI-enabled bots.
Africa is a little behind in this regard, but there are a handful of companies on the continent developing chatbots for companies and consumers, and they are reporting remarkable growth.
With all the evidence suggesting investors are increasingly active in this space, spying the opportunities hinted at by global trends, the chatbot space in Africa looks like it has a bright future.
A bot-building boom
“From our perspective, having started in 2016 and being one of the first conversation automation platforms in the country, we have definitely seen an increase in our clients’ willingness to explore new technology.”
So says Nick Argyros, chief executive officer (CEO) of South Africa’s GotBot, a social commerce and customer experience solution that enables clients to communicate with customers through Facebook Messenger, Twitter, WeChat, Skype, SMS, and web chat conversations.
Clients include Toyota, RCS, African Bank, Nissan, Flight Centre, Sanlam, Home Choice and Old Mutual Finance, and the startup announced in December it had raised US$171,000 in funding to speed its impressive growth.
GotBot has been around a little while already. Other chatbot startups, however, are very new, but have still witnessed great change in consumer mindsets. Dr Waleed Ghalwash is founder of Egypt’s MerQ, the startup behind Sally, an AI-enabled chatbot that provides users with comprehensive information to assist them when deciding between the different credit card options available across various banks.
MerQ, which has raised US$800,000 in funding, only launched its first bot last January but has already seen significant growth.
“We noticed that users back then were unaware that this was an automated messaging, but now we notice different behaviour from new users, who already understand the role of bots in customer service,” Ghalwash said.
A shared attraction
Chatbots are a rare case in that they are attractive to both companies and customers. From the company point of view, chatbots improve customer acquisition, increase revenue per user, reduce churn, and reduce cost to serve.
Antoine Paillusseau is co-founder and CEO of South Africa’s FinChatBot, which develops chatbots to help financial service providers acquire and retain customers through AI-powered conversations. The startup has 16 top tier clients, is seeing revenue growth of 270 per cent year-on-year, and raised funding in 2018, success Paillusseau puts down to the fact its chatbots are delivering up to 20 per cent increases in conversion rates, in 20 per cent less time.
“Chatbots are a complementary layer of your holistic experience and should overall delight customers. Organisations are rapidly leveraging AI to dramatically change the way they interact with customers,” Paillusseau said.
Customers like them too. Eighty-two per cent of people expect an immediate response on sales, and 65 per cent prefer chatting digitally to calling a business.
All of this means that the chatbot sector is slowly getting busier, but it is still not too competitive. Argyros said the majority of GotBot’s competitors over the last few years have been international, which he said has been to its benefit as he feels his team has a better understanding of the African technical and consumer landscapes. There are certain barriers to entry for local startups, in his view.
“It’s a fairly complex sector, with the use of some of the latest technologies. So highly skilled teams are needed, making entry into the market quite difficult,” said Argyros.
For financial services, for now…
What GotBot, FinChatBot and MerQ all have in common is there shared focus on the financial services industry, which has proven a happy hunting ground for the bot-builders given the desire amongst customers to avoid lengthy visits to branches or being put on hold for hours when all they want is a quote.
But it is not the only industry to which chatbots are relevant.
“The bot phenomenon will cause broad disruption across many industries, including medical, retail, hospitality and travel, banks, insurance and more,” said Paillusseau.
Argyros agrees chatbots have wide applications.
“Bots could play a role in almost any sector imaginable, anything from education to financial services,” he said.
This means bot-building businesses are inherently scalable. Paillusseau says the sky’s the limit for companies like FinChatBot, which owns its own software and is highly flexible in terms of development, solution application and location.
“We have a deep understanding of the financial industry and will gain significantly by developing for, and deepening our understanding of, the financial industry abroad. The FinChatBot team is currently focusing on integrating different languages, Natural Language Processing, and unique educational elements into the bots to better customer experience. What you see today is only the tip of the iceberg in terms of the power of chatbots,” he said.
GotBot, meanwhile, has spent the last three years developing a SaaS platform, and has built its infrastructure on services like Amazon Web Services (AWS), all of which Argyros said helps it scale from a technological point of view.
“We are most definitely built to scale as both our technology and the use cases can scale within different businesses and business verticals,” he said.
“Over the last year we have been concentrating on the automation of channels like WhatsApp. Building a scalable SaaS platform, behind scalable channels like WhatsApp, makes for an interesting combination.”
Ghalwash says the opportunity for chatbot developers is huge, noting a massive need for personalised and engaging experiences.
“We have had positive feedback, and retention rates exceeded our expectations on the customer side,” he said.
This optimism is again borne out by global figures, with Gartner estimating that 85 per cent of all customer interactions will be through chatbots by the end of this year, while by 2024 the overall global market size for chatbots will be US$1.3 billion. This significant market potential has attracted the attention of both local and international investors, with all three of the startups featured here having secured significant levels of funding.
“It is definitely something new, but you have to drill down to the business behind the bot,” Ghalwash said. “In the end bots are a new way to interact with users, not a goal in itself, but they are definitely attractive to investors with high risk appetite.”
If startups like MerQ, FinChatBot and GotBot continue on their current growth trajectories, and the global chatbot market grows in the manner projected, then any risks on the part of investors will soon prove to be worthwhile. All the signs are that Africa’s bot-builders are on to a winner.