Digital banking group Tyme’s valuation has shot up to nearly R27bn since its capital raise of $250m with Brazilian fintech Nubank buying into the group.
Tyme Group welcomed Nubank, the largest fintech bank in Latin America, and M&G on Tuesday as new shareholders. The Patrice Motsepe controlled African Rainbow Capital (ARC) remains the largest shareholder.
The group operates digital banks: TymeBank in SA and GoTyme Bank in the Philippines, with the former having amassed more than 10-million customers since its launch in 2019.
Nubank invested $150m, with M&G’s Catalyst subscribing for $50m, with existing shareholders putting in a further $50m.
Tyme Group founder and CEO Coen Jonker said the Nubank partnership brought significant expertise and resources to Tyme, positioning the company well to expand its market presence.
“Nubank transformed financial services in Brazil. We are excited by the value that Nubank’s thought partnership and advice can bring to Tyme particularly in areas such as data analytics, credit risk management, product development and marketing — levers we believe are key to achieving leadership in our markets. This is a moment of great significance for Tyme,” said Jonker.
The $250m capital raise pushed Tyme’s valuation to $1.5bn (R26.7bn), further increasing ARC Investments’ huge discount to net asset value (NAV).
Discount to NAV is the amount by which the net asset value exceeds the share price, calculated as the share price divided by the net asset value and expressed as a percentage.
Due to ARC Investment’s share price discount to NAV, the dozen companies that it owns are worth more individually than they are collectively under the holding company’s umbrella.
ARC Investment market value is about R11.3bn, while it values its assets at R20bn. Listing Tyme separately has the potential to address this financial inefficiency as it might attract specialist investors who want exposure to fintech assets rather than a hodgepodge of assets that range from mining to agriculture.
Tyme, SA’s first fully digital bank, may list on a major stock exchange in the next four to five years, as its valuation approaches R30bn.
Tymebank CEO Karl Westvig said the $250m put the lender on course to be a “three retail bank in SA” in the next three years.
“Additionally, the enhanced credibility and market visibility that comes with the affiliation with Nubank, along with the large established networks of global investors, including GIC, Berkshire Hathaway and others, helps pave the group’s path towards a potential listing by 2028,” said Westvig.
Nubank serves 110-million customers across Brazil, Mexico, and Colombia. Motsepe, who chairs ARC, said: “As the long-term strategic shareholder in Tyme, we enthusiastically welcome the partnership with leading global digital bank, Nubank, as we are convinced this will lead to an even higher and significantly accelerated growth trajectory for the multicountry Tyme Group.”
David Vélez, founder and CEO of Nubank, said: “Since the beginning of Nubank, we have believed that the future of financial services globally is of digitally native companies. We have met dozens of teams across different geographies. We think that Tyme Group is extremely well-positioned to be a digital bank leader in Africa and Southeast Asia. We are excited to work with Tyme to share many of our learnings of scaling this model to hundreds of millions of customers.”
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