South African banking start-up Tyme has raised $110m from investors to expand and launch a digital bank in the Philippines, in one of the biggest fintech investments spanning Africa and Asia.
JG Summit, one of the largest family conglomerates in the Philippines, and Apis Partners, the private equity group, will take minority stakes in the bank, as part of a deal announced on Tuesday.
The listed investment vehicle of South African billionaire Patrice Motsepe launched TymeBank in 2019 after securing the first commercial banking licence to be issued in South Africa in two decades.
It has since signed up almost 3m customers by slashing fees on accounts to undercut the country’s established banks, while working with a major supermarket chain to set up in-store kiosks.
The R1.6bn ($108m) deal “is one of the largest foreign investments any fintech company has secured in South Africa,” said African Rainbow Capital, the majority owner of Tyme which includes TymeBank in South Africa.
Tyme now plans to bring this model to the Philippines by applying for a digital bank licence and entering a joint venture with JG Summit, which owns a retail empire in the country.
“We think Tyme is a key innovation that we thought we could bring into the ecosystem here,” said Jojo Malolos, chief executive of JG Summit’s venture capital arm.
Online lenders in African and some Asian countries face similar challenges and opportunities, including significant unbanked populations who are looking for low-cost accounts.
Coen Jonker, Tyme’s co-founder and executive chairman, who recently moved to Singapore to lead the bank’s Asian expansion, said that “the future of digital banking is undoubtedly a multi-country future”, because the most competitive players would be able to scale their technology across borders.
Following the deal, Apis will own about 15 per cent and JG Summit around 5 per cent of Tyme after an initial $80m tranche of the investment.
TymeBank last year pulled back from planned expansion into unsecured loans as the pandemic hit South Africa’s economy. It has since launched “buy now, pay later” advances at supermarkets and is looking at credit card business.
Digital banking players in South Africa are also having to grapple with high unemployment as the economy emerges from lockdowns. According to statistics released on Tuesday, South Africa’s unemployment rate, including discouraged jobseekers, remained at nearly 43 per cent at the end of 2020.
Despite the downturn during the pandemic, “we are still very bullish about South Africa”, said Matteo Stefanel, managing partner at Apis. “We think if anything, it is high time to make this investment.”