Emerging South African digital bank TymeBank, which has on-boarded 2.8-million customers 24 months after launching, has secured an investment of R1.6-billion, attracting new investors from the UK and Philippines.
The investment, which is one of the largest foreign investments any financial technology company has secured in South Africa, will be deployed to bolster TymeBank’s growth and secure its path to commercial success.
The new investors in TymeBank are Apis Growth Fund II, a private equity fund managed by Apis Partners, 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. Apis is a private equity asset manager that supports growth-stage financial services and financial infrastructure businesses.
About R500-million of the overall R1.6-billion has already been invested, with the balance of R1.1-billion to be invested over the next 12 to 15 months.
The investment, according to TymeBank, 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 CEO Tauriq Keraan says growth of South Africa’s digital banks, which are still in infancy stages, is only possible with investments from partners that understand and support the growth trajectory of digital banks.
TymeBank co-founder Coen Jonker says that, 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.”
TymeBank, a member of the Tyme group of companies headquartered in Singapore, is expected to reach a milestone of three-million customers by the end of March. It was the first bank to be granted a commercial banking licence since 1999.
Along with TymeBank’s existing shareholders, which include 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.
TymeBank values the global expertise that Apis and JG Summit will bring as shareholders and Apis as a board member. Apis has a strong focus on measuring the sustainability and societal impact of an investment in a company or business. Apis’ experience through its network of payments companies, microfinance banks, and fintech platforms will provide valuable experience for TymeBank through its expansion phase.
The new investment will enable 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 ambition of broadening access to financial services to individual clients, entrepreneurs, and small and medium-sized business owners into the banking ecosystem.
African Rainbow Capital chairperson Dr Patrice Motsepe, in expressing his “delight” in having new co-investors on board, says the Apis and the Gokongwei family investment into TymeBank comes at a time when significant uncertainty reigns globally and in South Africa as a result of the Covid-19 pandemic.
“The invest[ment] . . . 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.”
JG Summit president and CEO Lance Gokongwei says the investment not only propels the Gokongwei Group to accelerate its foray into disruptive digital plays, it also enables the company to learn more about TymeBank's experiences that provide good impetus for JG Summit in considering the application of its technology and success in the Philippines.
Apis Partners managing partner Matteo Stefanel says Apis is 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.”
Fellow managing partner Udayan Goyal says that, as smart banking usage increases globally, TymeBank is well positioned to start this exciting new growth phase.
Meanwhile, TymeBank notes that some aspects of the transaction remain subject to regulatory approvals.