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TymeBank plans offshore expansion after scoring R1.6bn funding

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Digital-only bank TymeBank says it is exploring international opportunities after securing R1.6 billion in funding from investors in the UK and Philippines.

The financial injection, which the bank says is one of the largest foreign investments any fintech company has secured in SA, will be used to expand TymeBank’s range of banking products, grow its lending portfolio locally, and will be channelled towards funding the digital player’s offshore expansion opportunities.

The new investors in TymeBank are Apis Growth Fund II, a private equity fund managed by London-based Apis Partners, and JG Summit Holdings, one of the largest investment conglomerates in the Philippines, owned by the Gokongwei family.

Apis is a private equity asset manager that supports growth-stage financial services and financial infrastructure businesses.

Along with TymeBank’s existing shareholders, which include majority shareholder African Rainbow Capital (ARC), the new investors will grow the digital player into a top tier retail bank in SA, according to a statement.

“As the controlling shareholder in TymeBank, ARC is delighted to have our new co-investors on-board,” says Dr Patrice Motsepe, chairman of ARC.

“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 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 our country. We look forward to a long-term partnership with Apis and the Gokongwei family.”

Of the total investment of R1.6 billion, some R500 million has already been invested. The balance will be invested over the next 12 to 15 months.

TymeBank says it values the global expertise that Apis and JG Summit will bring as shareholders and Apis as a board member of the bank.

The branchless bank, which targets underbanked and underserviced South Africans through low and transparent bank fees, says Apis’s experience through its network of payments companies, microfinance banks and fintech platforms will provide valuable experience through its expansion phase.

In addition, the parties have entered into an agreement to launch a digital bank in the Philippines.

Dr Patrice Motsepe, chairman of African Rainbow Capital.
Dr Patrice Motsepe, chairman of African Rainbow Capital.

“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,” says Lance Gokongwei, president and CEO of JG Summit.

The investment not only propels the Gokongwei Group to accelerate its foray into the disruptive digital space, it also allows the investment firm to learn more about TymeBank's experiences that provide a good impetus in considering to apply its technology and success in the Philippines, adds Gokongwei.

“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 this investment will accelerate TymeBank’s growth and already impressive onboarding figures,” says Matteo Stefanel, managing partner at Apis Partners.

Digital banking boom

The investment is expected to see TymeBank strengthen its position locally, to better contend with digital-only competitors Discovery Bank and Bank Zero, which is focusing on a “closed rollout” before launching publicly later this year.

Having launched formally in February 2019, TymeBank says it continues to on-board an average of 110 000 new customers per month, and expects to reach the three million customer milestone next month.

ARC says while the onset of the COVID-19 pandemic initially presented a challenging operating environment for the bank, it has subsequently 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 four million by 2022.

The new funding will also be used to enhance its propositions in insurance, credit cards and other value-added services.

Tauriq Keraan, CEO of TymeBank.
Tauriq Keraan, CEO of TymeBank.

In September, the bank signed a bancassurance deal with Hollard to offer customers funeral policy plans without any paperwork.

In July, the bank revealed it had introduced a fast mode of transaction, SendMoney, which allows users to send and receive money through their electronic gadgets.

In December, TymeBank collaborated with global augmented identity firm IDEMIA, to enable a secure, safer and convenient way for customers to make contactless transactions using their bank cards.

Tauriq Keraan, CEO of TymeBank, explains: “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.”

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