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South African Digital Bank, TymeBank Secures $109m Investment

South African digital bank TymeBank has secured an investment amounting to $109 million, attracting new investors from the UK and Philippines.

The new investors in TymeBank are Apis Growth Fund II, a private equity fund managed by Apis Partners (Apis), and JG Summit Holdings (JG Summit), which is one of the largest and renowned conglomerates in the Philippines.

The investment, which is one of the largest foreign investments any fintech company has secured in South Africa, will be deployed to bolster TymeBank’s growth and secure its path to commercial success.

The investment represents a strong endorsement for both TymeBank as one of the world’s fastest-growing digital banks and for South Africa’s banking sector overall.

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.

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.

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. They have also entered into an agreement to launch a digital bank in the Philippines, testament to the innovation and digital banking capabilities TymeBank has built.

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.

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.

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.

Commenting on the transaction, Dr Patrice Motsepe, Chairman of African Rainbow Capital, the majority owner of TymeBank, said:

“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.

“The invested amount of $109 million 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 our country. We look forward to a long-term partnership with Apis and the Gokongwei family.”

Mr Lance Gokongwei, President and CEO of JG Summit commented: “We see digital banking as the next growth area globally and increasingly in ASEAN and so we are excited to partner with global investment giants Apis and ARC in taking part in this global play by building further successes for South Africa’s leading digital bank TymeBank.

“The investment not only propels the Gokongwei Group to accelerate its foray into disruptive digital plays, it also allows us to learn more about TymeBank’s experiences that provide a good impetus for us in considering to apply their technology and success in the Philippines.

“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.”

Mr Matteo Stefanel, Managing Partner of Apis Partners commented: “As an experienced investor in financial services, we are thrilled to partner with the team at TymeBank who have built an exceptional business in a competitive market such as South Africa. We are confident that this investment will accelerate TymeBank’s growth and already impressive onboarding figures.

“Managing to source, evaluate and close this deal whilst Covid-19 uncertainty was still rife in the market is a testament to the strength of the teams at both Apis and TymeBank. We look forward to continuing this relationship over the coming years.”

Mr Tauriq Keraan, Chief Executive Officer of TymeBank commented: “The establishment of digital banks in South Africa is in its 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. 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.”