TymeBank, the emerging lender backed by Patrice Motsepe’s African Rainbow Capital (ARC), has caught the interest of one of the world’s most recognisable tech names, Tencent, viewing this as a sign of faith in a digital banking model it hopes to roll out in parts of Asia.
Most of the $70m (R1.1bn) raised in TymeBank’s latest funding round will be used to fund growth in SA, co-founder Coen Jonker told Business Day. But just less than a third is being earmarked for its second digital bank, in the Philippines, ahead of an expected launch in the third quarter of 2022.
“We very much see ourselves as serial bank builders, so we will be going into new markets,” said Jonker.
The $70m marks the completion of a $180m capital-raising round, with Chinese tech giant Tencent and CDC Group, a UK development finance institution, becoming new shareholders.
It follows $110m from private equity firm Apis Partners and JG Summit Holdings, which is one of the largest conglomerates in the Philippines and is owned by the Gokongwei family. Tyme has since set up a joint venture with the Gokongwei group for its new bank there, GoTyme, to use its partner’s extensive mall and retail footprint.
Tyme declined to break down the composition of the $70m but said most of it comes from Tencent, whose shareholding will amount to 7%-8%. ARC will retain a shareholding of just more than 50%.
Break even
Tyme uses a hybrid model of digital banking with physical service points to give it scale, and in SA has partnerships with retailers TFG and Pick n Pay and Boxer stores, as well as the Zion Christian Church.
Tyme has 4.2-million customers in SA, where it has grown rapidly since its launch in February 2019. The group is focusing on SA as it looks to break even in 2022, and wants to diversify its services and the demographics of its customers before putting more time into offshore expansion.
CEO Tauriq Keraan said management’s focus will be on growing new channels to the market in 2022. While TymeBank has succeeded in bringing banking services to the marginalised, it needs to broaden its customer base and expand away from simply saving and transacting.
“On every measure of financial inclusion we have outperformed,” he said. “But it is a portfolio game.”
Tyme is looking to its partnership with TFG to pick up higher-income customers, but also to a raft of new services, including a “buy now, pay later” product called MoreTyme, which it hopes will attract millennials with an aversion to credit cards.
Progressive regulation
The group is also adding an insurance offering, TymeHealth, aiming to broaden access to private medical insurance with products priced from as little as R149 a month.
Jonker said TymeBank is looking for expansion into countries that have a combination of progressive regulation, a digital-savvy but underserved population and well-developed retail infrastructure. This includes much of South and East Asia, including Indonesia, but India and Pakistan “are at the top of that list”, he said.
Update: December 7 2021
This article has been updated with additional information throughout.
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