TymeBank is set to substantially grow its South African offering and expand to the Philippines following a R1.6 billion investment injection.
The investment by Philippines-based JG Summit Holdings and private equity firm Apis Growth Fund II will give the new shareholders a stake of about 20% in the bank, while maintaining African Rainbow Capital as the majority shareholder.
Jojo Malolos, president of JG Digital Equity Ventures, says although the JG conglomerate already has a bank within its portfolio, the bank would have to give up its commercial licence and close all branches to be recognised as a digital bank.
“We needed a partner and we saw the opportunity to both invest in TymeBank and bring them in for a joint venture in the Philippines. TymeBank presents a good model for us that is consistent with what we have. JG Summit already has a large retail footprint that we can leverage,” he says.
JG Summit and TymeBank have formed a 60/40 joint venture (GoTyme) to apply for the digital banking licence in the Philippines.
“Applications opened last December. We will be applying for the bank licence in two to three weeks and then the approval process takes three to six months. Realistically, we are looking at opening GoTyme in the first quarter of 2022,” says Malolos.
Customer base to grow to 4m in the next year
Boasting 2.8 million customers currently, TymeBank is the first bank in South Africa to be operated fully off a cloud-based infrastructure network. A distribution partnership with Pick n Pay and Boxer means TymeBank has kiosks located at stores across the country.
The bank says it is onboarding an average of 110 000 new customers in SA per month and expects to hit the three million mark by the end of March.
The onset of the Covid-19 pandemic has led to increased demand for digital banking options across all income groups in South Africa, buoying TymeBank’s goal to grow its customer base to four million by this time next year.
Matteo Stefanel, managing partner of Apis Partners, says he is confident the investment will accelerate TymeBank’s growth and already impressive onboarding figures.
Apis has a strong focus on measuring the sustainability and societal impact of an investment in a company or business. The private equity firm is expected to leverage its experience through its network of payments companies, microfinance banks and fintech platforms to support TymeBank through its expansion phase.
Serial bank builders
Coen Jonker, co-founder of TymeBank, says the bank will have created about 1 200 sustainable jobs in the next year, more than doubling the current 500 South African ambassadors.
“We expect the joint venture in the Philippines to have a similar effect in terms of job creation,” says Jonker.
“As serial bank builders, we are eyeing Malaysia as our next market. That’s where the next digital licence regulatory changes are happening, and they are opening up the licensing in the next year.
“We are also looking at other markets such as Vietnam and Indonesia where similar new regulations are coming into place that are perfect for our banking model,” he says.
New products for SA
Jonker says of the R1.6 billion cash injection, R500 million has already been invested towards funding the bank’s South African expansion.
TymeBank recently launched two insurance products and has plans to launch a ‘buy now, pay later’ product called MoreTyme towards the middle of the year.
“We are also building an iOS app and launching a credit card later this year in addition to onboarding about 500 new ambassadors to drive our brand,” says Jonker.