South African digital bank TymeBank has raised R1.6 billion (around $109 million) from new investors from the UK and Philippines to bolster TymeBank’s growth and secure its path to commercial success.
The new investors in TymeBank are Apis Growth Fund II, a PE fund managed by Apis Partners (Apis), and JG Summit Holdings, which is one of the largest conglomerates in the Philippines and owned by the Gokongwei family. Both these investors are experienced in financial services in emerging markets.
According to Mr Tauriq Keraan, Chief Executive Officer of TymeBank, “Our new shareholders in TymeBank have significant experience in digital financial services in key emerging markets. We certainly look forward to learning from their experience to enhance our own offering to South African customers.”
Regulated by the Prudential Authority of the SA Reserve Bank, TymeBank is the first bank in South Africa to be operated fully off a cloud-based infrastructure network. It was also the first bank to be granted a commercial banking license since 1999.
TymeBank currently boasts some 2.8 million customers and is expected to reach a milestone of 3 million customers by the end of March 2021. This month the bank is celebrating its 2nd anniversary, having officially launched on 26 February 2019.
Along with TymeBank’s existing shareholders, which includes majority shareholder African Rainbow Capital, the new investors are committed to grow TymeBank into a top tier retail bank in South Africa and expand to the Philippines and beyond.
Of the total investment of R1.6 billion, some R500 million has already been invested. The balance of R1.1 billion will be invested over the next 12 to 15 months.
“As the controlling shareholder in TymeBank, African Rainbow Capital is delighted to have our new co-investors onboard. Equally important, Apis and the Gokongwei family invest in TymeBank at a time when significant uncertainty reigns globally and in South Africa as a result of the Covid-19 pandemic,” commented Dr Patrice Motsepe, Chairman of African Rainbow Capital, majority owner of TymeBank, during the raise adding that the invested amount of R1.6 billion is no small feat – both in terms of drawing investment into South Africa’s financial services sector as well as investing into a fledgling part of the sector in the country.
Both Apis and the Gokongwei family made the investment in TymeBank based on the strength of TymeBank’s value proposition. TymeBank is satisfying customer demand for low and transparent bank fees, which is generally viewed as both costly and difficult to understand in South Africa. The bank is also improving access to underbanked and under serviced people in the country.
TymeBank onboards an average of 110,000 new customers per month, making it globally recognized for digital banking in emerging markets. The onset of the Covid-19 pandemic has led to increased demand across all customer income groups in South Africa for digital banking options. This supports TymeBank’s goal to grow its customer base to 4 million by 2022.
The new investment will allow TymeBank to further expand its range of banking products and grow its lending portfolio. The bank will also seek to enhance its propositions in insurance, credit cards, and other value-added services to customers. This will support the bank’s ethos of broadening access to financial services to individual clients, entrepreneurs, small and medium business owners into the banking ecosystem.
In line with the bank’s purpose to drive financial inclusion and increase customer choice in the banking sector, TymeBank offers a transactional bank account with no monthly fees and an immediate access savings product with a competitive interest rate. Most TymeBank customers are on-boarded via its physical kiosk located in Pick n Pay and Boxer stores across the country.
Overall, the foreign investment is seen as a positive development for both the South African banking landscape as well as the country in general.
“With the Philippines progressively going into digital banking to bring about better financial inclusion for a greater majority of its population, this augurs well to help us successfully deliver on our purpose as a business – that of having an unrelenting commitment to provide our customers with better choices, creating shared success with our various stakeholders,” said Mr Lance Gokongwei, President and CEO of JG Summit.
The investment not only propels the Gokongwei Group to accelerate its foray into disruptive digital plays, it also allows it to learn more about TymeBank’s experiences that provide a good impetus for it in considering to apply their technology and success in the Philippines.
“Internationally, digital banks are starting to take significant market share from traditional players. More importantly, they are driving industry transformation and helping more people participate in the economy. Both Apis and JG Summit have already proven their commitment to this cause. We can’t wait to work with them in South Africa, the Philippines and beyond.” said Mr Coen Jonker, co-founder of Tyme.