Tyme, the fast-growing digital banking group backed by Patrice Motsepe, has successfully secured two new international investors as part of its pre-series C capital raise launched in January 2023.
The news comes shortly after the group’s flagship SA entity, TymeBank, reached 7-million customers on May 12. The two shareholders are Norrsken22, an Africa-focused tech growth fund, and Blue Earth Capital, an independent global impact investment firm.
“Blue Earth is excited about backing Tyme’s innovative, retail partnership model, which enables affordable access to first-class banking products to all consumers, including those most vulnerable or living in remote locations,” said David Moore, group’s principal of funds and co-investments.
“We have analysed a lot of fintechs from across the continent, and Tyme set itself apart with its impressive growth, its differentiated product, and its unique ability to reach and serve new customer groups,” said Natalie Kolbe, managing partner at Norrsken22.
Though Tyme did not disclose the amount the two new investors committed to the group, it said total capital commitments attracted now amounted to $77.8m (R1.5bn). The funds are intended to expand operations in SA and the Philippines, as well as future expansion in Southeast Asia, coupled with a partial share buyback.
“A significant portion of that [$77.8m] came from the new investors,” said Coen Jonker, co-founder of Tyme and TymeBank CEO, though he declined to disclose precise amounts. “We’re using about $12m for a share buyback. That’s just some of the initial investors that are coming to the end of their fund term.”
Jonker said the remaining amount of about $65m would be invested back into the group’s operations, of which about $40m would be allocated to SA. About half the money that will be invested in SA will go to cover guarantee payments associated with Tyme’s purchase of Retail Capital. The balance will be used to expand the SME loan book.
The remaining funds will mostly be invested in the Philippines.
TymeBank bought out 100% of Retail Capital in 2022 to expand into SME lending by using a model known as merchant cash advances, which fund SMEs based on turnover and cash flow rather than assets.
“We’re seeing great growth in the small business loan book. Then the rest of it almost all it will be invested in the Philippines,” said Jonker. “The consumer side of the business is growing very nicely but of course it is not as capital hungry as the [SME] lending side.”
Though Tyme is growing at a pace of 300,000 new customers a month and has a revenue run rate of more than $100m a year, the group is poised to exceed that growth rate this month. Jonker said Tyme would probably gain 400,000 new customers this month alone with about 250,000 expected from SA and 150,000 in the Philippines.
TymeBank alone has acquired about 200,000 customers a month since its launch in February 2019.
TymeBank’s hybrid model of digital banking and physical service has made banking more accessible in SA thanks in part to the partnerships with retailers such as Pick n Pay, Boxer, and TFG (The Foschini Group), as well as the Zion Christian Church. In addition Retail Capital helps fund small businesses.
The group launched its operations in the Philippines in October 2022 under the GoTyme banner in partnership with the Gokongwei Group. The operations there are modelled on SA’s TymeBank and aimed at offering Filipino consumers affordable and accessible financial services.
The group’s global footprint includes a product development and engineering hub in Ho Chi Minh City, Vietnam, which employs a team that includes more than 200 engineers, while its global headquarters are in Singapore.
Business Day reported in January that TymeBank was looking to expand its lending businesses by moving into a third country, with Vietnam and Indonesia having emerged as favoured markets. The group had previously considered entering into Pakistan, but cancelled that plan due to challenges in obtaining a digital banking licence there.
“Pakistan is off the table,” said Jonker. “Indonesia is on the list but currently at the top of the list is Vietnam.”
Tyme said it continues to work with interested investors about raising additional capital with its Series C capital raise expected to close later in 2023. African Rainbow Capital (ARC) remains Tyme’s majority shareholder.
“We will probably raise between $35m and $80m [in the Series C capital raise] depending on the price,” said Jonker. “That’s really because we’re seriously looking at expanding the country into a third country.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.