The onset of the pandemic has led to increased demand among customer income groups around the world for digital banking options. We have seen how digital banks like Zolve and Nubank have raised funds in recent months to meet this need. This time, an African startup has joined the party.
TymeBank, a South African digital bank, today announced that it has secured an investment of R6 billion (~ $ 109 million) from new investors in the UK and the Philippines. The company made this known via a statement. This investment will be used to support TymeBank’s growth and stimulate its business expansion across the country.
However, this investment will be made in two installments. According to the company, 500 million rand ($ 34 million) has already been invested in the business, while the rest – 1.1 billion rand ($ 75 million) – will be invested over the next 12 to 15 years. month.
TymeBank offers a transactional bank account with low or no monthly fees and a savings product. Most of its customers are integrated through physical kiosks, typically in Pick n Pay and Boxer stores across the country. Since its launch in February 2019, TymeBank has grown rapidly and now has approximately 2.8 million customers. The company says it is on track to reach 3 million by the end of next month.
Investors for this unnamed round include Apis Growth Fund II, a private equity fund managed by Apis Partners, and JG Summit Holdings, owned by Gokongwei, one of the largest conglomerates in the Philippines. Both of these investors are experienced in financial services in emerging markets; Apis, for example, is a private equity asset manager that supports growing financial services and financial infrastructure companies.
It should be noted that this is one of the biggest increases, if not the biggest, for a digital bank on the continent. Tauriq Keraan, CEO of TymeBank, considers that this is largely due to the fact that more investors appreciate the importance of digital banking as well as the value propositions of the company – the first which improves the ‘access to underbanked and underserved customers in South Africa, and the other, meet customer demand for low and transparent bank fees, which are generally considered expensive and difficult to understand nationwide.
“Digital banking establishments in South Africa are still in their infancy. Growth in this particular segment of financial services is only possible with investments from partners who understand and support the growth trajectory of digital banks, ”he said.
With already existing shareholders like African Rainbow Capital (founded by South African billionaire Patrice Motsepe), TymeBank says these new investors will make the company a leading retail bank in South Africa. This investment will also help the company to expand its range of banking products and develop its loan portfolio. Diversification of offers is essential and TymeBank seeks to enrich its insurance and credit card offers for its customers.
“As the majority shareholder of TymeBank, African Rainbow Capital is delighted to welcome our new co-investors. Equally important, Apis and the Gokongwei family are investing in TymeBank at a time when significant uncertainty reigns globally and in South Africa due to the COVID-19 pandemic, ”said Dr Patrice Motsepe, majority owner of TymeBank and Chairman of African Rainbow Capital. “The amount invested of 6 billion rand is no small feat both in terms of attracting investment in the South African financial services sector and investing in a nascent part of the sector in our country.”
TymeBank claims to receive an average of 110,000 new customers per month. This makes it globally recognized for digital banking in emerging markets, and the plan is to reach 4 million customers next year. In terms of growth, TymeBank is currently outperforming its competitors in Africa and can be considered one of the fastest growing digital banks in the world today. The company is the first bank in South Africa to be fully operated from a cloud-based infrastructure network and the first to obtain a commercial banking license in the country since 1999.
However, TymeBank is not of South African origin. It is a member of the Tyme group of companies headquartered in Singapore. The holding company, Tyme, focuses on the design, construction and operation of digital banks for emerging markets. Building on its success in South Africa, Tyme plans to launch operations in Asia and has reached a deal to launch a digital bank in the Philippines in the coming months.