Patrice Motsepe-backed ARC Investments today announced that TymeBank South Africa (TymeBank) and Tyme Global have completed a $70 million or R1.1 billion Series B capital raise.
The capital raise was led by China’s Tencent and CDC Group, the UK’s development finance institution.
The investment makes Tencent and CDC Group shareholders of both TymeBank and Tyme Global.
“The investment will enable Tyme to use its digital infrastructure to accelerate the rollout of financial services to TymeBank’s historic mass-market customer base,” ARC Investment informed shareholders today.
“The two investors’ capital and expertise will be used to strengthen Tyme’s ability to manage risk and support Tyme’s expansion into emerging markets.”
The first part of Tyme’s Series B raise concluded earlier this year when it secured $110 million or R1.7 billion from Apis Growth Fund II, a private equity fund managed by Apis Partners LLP, and the Gokongwei family’s JG Summit Holdings.
This brings the combined capital raise to $180 million or R2.8 billion.
African Rainbow Capital remains the majority shareholder post this investment.
TymeBank, which is one of the world’s fastest-growing digital banks, has acquired four million customers in 32 months, with a noticeable acceleration in its acquisition rate.
The hybrid model of digital banking and physical services has made banking accessible to South Africans across the economic spectrum.
CDC’s investment in Tyme in South Africa is part of its strategy to support businesses that provide vital infrastructure, such as digital financial services, to traditionally underserved groups.
“This is a momentous event for TymeBank. We look forward to continuing to demonstrate our strong strategic and execution capabilities to all our investors and to benefit from the deep global expertise that Tencent and CDC have accumulated through a multitude of investments in digital businesses,” TymeBank CEO Tauriq Keraan said.
“We are equally excited about the opportunity to pursue the synergies that exist between all investors and partners, ultimately to ensure added value for our customers.”
The investment by Tencent and CDC represents a strong endorsement for both TymeBank – as one of the world’s fastest-growing digital banks – and for South Africa’s banking sector overall. TymeBank is fully regulated and held to the same standards of safety and security as all other banks in South Africa.
TymeBank is the first bank in South Africa to be operated fully off a cloud-based infrastructure network. It was also the first bank to be granted a commercial banking licence since 1999.
“We are delighted to welcome Tencent and CDC as our new co-investors in Tyme. The ability to attract investors of this calibre is a testament to the global competitiveness of Tyme’s value proposition, and its management,” Dr Motsepe, Founder and Chairman of African Rainbow Capital, which is the majority shareholder of Tyme, said.
“The success of TymeBank in South Africa is an example of our innovation in financial services, and this is evidenced in our business model. We look forward to a long and successful relationship with Tencent and CDC.”
In the Philippines, GOTyme was successfully awarded one of six digital banking licences in August this year. Tyme’s strategy is to embed banking in people’s everyday lives, making it an integral part of shopping and business experiences. This is particularly important in a country with an unbanked population of over 70%. The build-phase is currently underway in the Philippines, and Tyme is on track to launch in the third quarter of 2022. It is aiming to leverage its partnership with the Gokongwei Group.
The finalisation of the investments is subject to conditions precedent and regulatory approvals, which are normal for transactions of this nature.