Digital Banking Sees Increased Investment: TymeBank Secures $109 Million

The global pandemic has accelerated the adoption of digital banking solutions across all income demographics. The rising demand has fueled investment in digital banks, as evidenced by recent funding rounds for companies like Zolve and Nubank. Now, a financial technology startup originating from Africa is joining this trend.

TymeBank Receives Significant Funding

TymeBank, a digital banking institution based in South Africa, has announced a R1.6 billion (~$109 million) investment from new partners located in the U.K. and the Philippines. This information was disseminated through an official company statement. The capital injection is intended to support TymeBank’s expansion and strengthen its position within the South African market.

The investment will be distributed in two phases. An initial R500 million ($34 million) has already been allocated to the business. The remaining R1.1 billion ($75 million) is scheduled for deployment over the subsequent 12 to 15 months.

Services and Growth of TymeBank

TymeBank provides customers with a transactional bank account characterized by minimal or no monthly fees, alongside a savings product. A significant portion of customer acquisition occurs through physical kiosks situated within Pick n Pay and Boxer retail locations nationwide. Since its launch in February 2019, TymeBank has experienced substantial growth, currently serving approximately 2.8 million customers. The bank anticipates reaching 3 million customers by the end of the following month.

Investors and Expertise

The investors in this funding round include Apis Growth Fund II, a private equity fund managed by Apis Partners, and JG Summit Holdings, a major conglomerate owned by the Gokongwei family in the Philippines. Both entities possess considerable experience in the financial services sector within emerging markets. Apis Partners, for example, specializes in supporting growth-stage businesses focused on financial services and related infrastructure.

A Landmark Investment for African Fintech

This funding round represents one of the largest, and potentially the largest, investments ever secured by a digital bank on the African continent. Tauriq Keraan, CEO of TymeBank, attributes this success to growing investor confidence in the importance of digital banking and the bank’s compelling value proposition. This includes improved financial access for underserved populations in South Africa and the provision of transparent, low-cost banking services – a feature often perceived as expensive and complex.

“The development of digital banks in South Africa is still in its early stages. Sustained growth within this segment of the financial services industry requires investment from partners who understand and support the unique growth path of digital banks,” Keraan stated.

Future Expansion and Product Diversification

With existing shareholders such as African Rainbow Capital (founded by South African billionaire Patrice Motsepe), TymeBank believes these new investors will facilitate its evolution into a leading retail bank in South Africa. The investment will also enable the expansion of its product offerings and the growth of its lending capabilities. Diversification is a key strategy, with plans to enhance its insurance and credit card propositions for customers.

“As the controlling shareholder in TymeBank, African Rainbow Capital welcomes our new co-investors. Importantly, Apis and the Gokongwei family are investing in TymeBank during a period of significant global and South African uncertainty caused by the COVID-19 pandemic,” said Dr. Patrice Motsepe, majority owner of TymeBank and chairman of African Rainbow Capital. “Securing R1.6 billion in investment is a substantial achievement, both in terms of attracting capital to South Africa’s financial services sector and investing in a nascent segment of our national economy.”

Rapid Customer Acquisition and Global Recognition

TymeBank reports an average of 110,000 new customers each month. This rapid growth has garnered international recognition for digital banking within emerging markets. The company aims to reach 4 million customers in the coming year. Currently, TymeBank’s growth rate surpasses that of its African competitors, positioning it as one of the fastest-growing digital banks globally.

Notably, TymeBank is the first bank in South Africa to operate entirely on a cloud-based infrastructure and the first to receive a commercial banking license in the country since 1999.

International Ambitions

While operating in South Africa, TymeBank is part of the larger Tyme group of companies, headquartered in Singapore. The parent company, Tyme, specializes in the design, development, and operation of digital banks for emerging markets. Building on its success in South Africa, Tyme plans to expand into Asia and has reached an agreement to launch a digital bank in the Philippines in the near future.