FAST-GROWING digital banking group TymeBank has secured investment of $70 million (R1.12 billion) from Tencent and UK-based development organisation CDC in a capital raise, paving the way for its global expansion.
TymeBank chief executive Tauriq Keraan said yesterday that Tencent and CDC had invested an additional $70m in a $180m capital raise – the first part was concluded earlier this year when $110m was secured from Apis Growth Fund II, a private equity fund managed by Apis Partners, and Gokongwei’s JG Summit Holdings.
He said in an interview they were “delighted” with the capital raise, and the investments represented a “massive symbol” to the global investment community of the strength of the local banking sector, as well as the strengths of TymeBank’s business model. He said the new shareholders would bring considerable global experience to the bank.
African Rainbow Capital remains TymeBank’s majority shareholder with just more than 50 percent to retain the black ownership of the bank.
TymeBank, the first bank in South Africa to be operated fully off a cloud-based infrastructure network has grown fast, acquiring 4 million customers in 32 months, and its rate of new customers is accelerating, Keraan said in an interview yesterday.
Tencent is an internet and technology company based in China, and CDC Group is the UK’s development finance institution and impact investor.
The $180m would be used to grow TymeBank locally and to fund GOTyme in the Philippines, where it had secured a digital bank licence in partnership with the Filipino conglomerate, Gokongwei Group, with the possibility of further international expansion.
Tyme co-founder Coen Jonker said they had secured one of six digital licences in the Philippines and the bank’s market was potentially about 2.5 times the size of its South African market, with about 70 percent of the digitally-savvy Philippine population still unbanked.
They would adopt the same banking model in the Philippines, partnering with selected retail outlets, as in South Africa.
He said over the longer term, they hoped to establish banks in other countries where there were similar potential mass market customer characteristics.
The new investments would enable Tyme to use its digital infrastructure to accelerate the rollout of financial services. The two investor’s capital and expertise would be used to improve risk management and support expansion into markets where CDC has a presence, said Keraan.
The bank has made banking accessible to South Africans across the economic spectrum through partnerships with Pick n Pay and Boxer as well as the largest church in South Africa, the Zion Christian Church.
TymeBank recently partnered with TFG (The Foschini Group) to diversify its customer base into higher income segments.
TymeBank also recently launched its buy-now pay-later product MoreTyme; and a number of value-added services including the ability of customers to be paid their salaries a day early; and various off-balance sheet products such as insurance.
CDC’s investment in Tyme in South Africa was part of its strategy to support businesses that provide vital infrastructure, such as digital financial services, to traditionally under-served groups.
Most new TymeBank accounts were opened at kiosks; but the bank had also experienced a marked increase in accounts being opened online, and as well as a progressive shift from cash deposits to electronic transfers, said Keraan.
It currently holds about R2.8bn in deposit balances, all from consumers and sole proprietors, and had taken in R33bn in gross deposits from the public since the onset of the pandemic in March 2020. Keraan said
Tyme’s global footprint now includes a product development and engineering hub in Ho Chi Minh city, Vietnam and banking businesses in South Africa and the Philippines.
“We have attracted a team of skilled people, including over 200 engineers, and have established strategy, business development, data, analytics and Artificial Intelligence functions in our global headquarters in Singapore,” said Jonker.
He said Tencent and CDC had accumulated deep experience in the global digital environment through a multitude of investments in digital businesses.
African Rainbow Capital chairman Dr Patrice Motsepe said, “The success of TymeBank in South Africa is an example of our innovation in financial services, and this is evidenced in our business model.”
The build-phase was under way in the Philippines, and the bank was on track to launch in the third quarter of 2022.
BUSINESS REPORT ONLINE