The onset of the pandemic has led to increased demand for digital banking options across customer income groups around the world. We’ve seen how digital banks like Zolve and Nubank have raised money in recent months to fill this need. This time, a startup from Africa has joined the party.
TymeBank, a South African digital bank, announced today that it has secured an R1.6 billion (~$109 million) investment from new investors in the U.K. and Philippines. The company made this known via a statement. This investment will be used to bolster TymeBank’s growth and drive its commercial expansion across the country.
However, this investment will come in two tranches. According to the company, R500 million ($34 million) has already been invested in the business, while the rest — R1.1 billion ($75 million) — will be invested over the next 12 to 15 months.
TymeBank offers a transactional bank account with zero or low monthly fees and a savings product. Most of its customers are onboarded via physical kiosks, usually in Pick n Pay and Boxer stores around the country. Since launching in February 2019, TymeBank has grown rapidly and now has about 2.8 million customers. The company says that it’s on track to reach 3 million by the end of next month.
The investors for this unnamed round include Apis Growth Fund II, a private equity fund managed by Apis Partners, and Gokongwei-owned JG Summit Holdings, one of the largest conglomerates in the Philippines. Both these investors are experienced in financial services in emerging markets; Apis, for instance, is a private equity asset manager that supports growth-stage financial services and financial infrastructure businesses.
It is noteworthy that this is one of the largest raises, if not the largest, for a digital bank on the continent. Tauriq Keraan, the CEO of TymeBank, considers this to be largely due to more investors buying into the importance of digital banking and also the company’s value propositions — the first which is improving access to underbanked and underserviced customers in South Africa, and the other, satisfying customer demand for low and transparent bank fees, which is generally viewed as both costly and difficult to understand across the country.
“The establishments 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,” he said.
With already existing shareholders like African Rainbow Capital (founded by South African billionaire Patrice Motsepe), TymeBank says these new investors will grow the company into a top-tier retail bank in South Africa. The investment will also help the company expand its range of banking products and grow its lending portfolio. Diversification of offerings is key as well, as TymeBank seeks to enhance its propositions in insurance and credit cards to its customers.