TymeBank and its Hong Kong-based sister company Tyme Global have secured approximately R1.6 billion from two private equity firms.
Patrice Motsepe's African Rainbow Capital (ARC) Investments announced on Tuesday that Apis Growth Fund II, a private equity fund managed by Apis Partners and the JG Summit Holdings have become new shareholders in TymeBank. Their combined capital raise to the bank will be delivered in two tranches of US$ 80 million and later US$30 million.
Some R500 million has already been invested. The balance of R1.1 billion will be invested over the next 12 to 15 months.
ARC Financial Services has also decided to bulk up its stake in Tyme to hold approximately 59% when that transaction is complete.
TymeBank and Tyme Global which houses the challenger bank's intellectual property and serves as the vehicle for growth into other markets are planning to use the fresh capital to bolster Tyme's growth and secure its path to commercial success.
ARC said TymeBank which launched in February 2019 was expected to reach the 3 million customer milestone next month as it continues to onboard 110,000 new customers on average every month.
"The investment 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," said ARC Investments in a statement published on Tuesday morning.
ARC Investments added that this was one of the largest foreign investments to any fintech company in South Africa.
Who Are the New Investors?
Apis Partners is a private equity firm which focuses on financial services. It has stakes in fintech companies ranging from digital payment providers, SME funders and start-ups focusing on financial inclusion around the globe.
Its other investments in South Africa include stakes in the Efficient Group, third-party payments enabler, Tutuka and payments processing fintech, Adumo.
ARC said JG Summit is one of the largest and renowned conglomerates in the Philippines and owned by the Gokongwei family. Both these investors are experienced in financial services in emerging markets.
The two new shareholders will hold minority stakes in Tyme, with Apis having a 14.9% shareholding and JG Summit having a 5.13% shareholding after the investment of the first R1.1 billion tranche.